Everyone knows that supply chain collaboration is a good thing – or do they? Only one fifth of finance directors view their suppliers as strategic partners, according to a survey by Expense Reduction Analysts, a firm of procurement advisors.
Not only that. ERA points out that four out of five organisations don’t have a specialist procurement team or individual, and half of finance directors think that employees suffer from a lack of time, experience and energy when it comes to securing the best supplier deals.
And just to hammer home the point, 46 per cent of the companies surveyed said that their company only discussed procurement at board level only once a year or never.
Not surprisingly, Rob Allison, managing director, ERA, highlights the horse meat scandal to drive home the dangers of using suppliers without having comprehensive audit checks. “Cutting costs may keep businesses afloat temporarily, but if the correct checks aren’t put in place businesses are risking their long-term future.” he says.
Clearly audits and controls are important, but Professor Richard Wilding argues that what is really needed is a “Supply Chain Society” built on a shared culture and values.
And if everyone in the chain shares the same values, then it becomes much more difficult for issues such as horse meat in burgers ever to occur.
Technologies are also moving into the mainstream that can facilitate greater collaboration. Gartner reckons that by 2016, some 70 per cent of high-performing companies will manage their business processes using real-time predictive analytics or extreme collaboration by 2016.
Real time analytics can increase the visibility in how a company is running and what is happening in its external environment, allowing faster decision making.
“Human or automated actions can be initiated for proper decision making to achieve the desired business outcomes. If the situation dictates, knowledge workers can collaborate in and around the process, case or instance to decide on and effect change,” according to Jim Sinur, Gartner’s research vice president.
But all the technology in the world will not help if you have not built the right relationships with your supply chain partners.
And you can’t really build the right relationships if you start by rejecting the notion of strategic partnerships.