Successful relationships along supply chains can mean a lot more than just saving money and making it easier to trade. There are a lot more advantages than most can imagine. These are not always the obvious ones most would recognize. Having closer relationships can often mean long-term sustainability and short-term dissolution. Here are four of the benefits that often come from collaborative supply chain management.
Shared Value
Ideally, supply chains provide buyer-supplier relationships based on value and the fact value is consistently being delivered. Value may come from services, on-time deliveries, quality, returns management or any combination of these elements. This kind of solid relationship encourages buyers to increase their purchases from individual suppliers. If a buyer increases purchasing percentages, it enhances the supplier’s bottom line. At the same time, it has a negative impact on the competition.
Longer Collaborations Equal Lower Costs
A great long-term benefit from collaborative supply chain management is the cost savings. These are due to routine procedures that occur during the relationship. Sometimes it can take a year or two for buyers and sellers to work through processes until they become streamlined. At that point, it all becomes more efficient and less costly.
Power of Referrals
Word of mouth has always been a powerful tool and it’s true for supply chains too. Word of mouth referrals from members along the line can benefit from other organizations in the extended network. When a member has a long-lasting relationship with a partner in a supply chain, it easily expands to other marketplaces.
Innovation from Long-Term Collaboration
The global rise in competitiveness puts more pressure on managers to develop new processes that can improve customer service and reduce costs. Collaborative supply chain management means collaborative partnerships to foster innovative ways that provide value for partners while reducing costs.
