Welcome back to our three-part series about supply chain collaboration: what it is, its challenges, and now, the benefits of supply chain collaboration.
To truly build a successful supply chain, everyone involved must be able to communicate and work together quickly and easily. Without that ability, each side will experience costly delays and bottlenecks, which only lead to more problems.
In fact, according to one estimate, disruptions could wipe out half a year’s profits or more. Bring buyers and suppliers together in a single solution. You’ll see the benefits in no time.
Collaboration Builds Efficiency
When buyers and suppliers work closely together, they reduce redundancy and eliminate communication delays. Those two challenges alone create immense workloads for thousands of buyers in the industry. They chase emails through cluttered inboxes, looking for time-sensitive acknowledgements and change updates. That leaves them working long hours on evenings and weekends—just to keep up with their most basic tasks.
One of the top benefits of supply chain collaboration is a significant increase in buyer efficiency. In fact, buyers see a 25% reduction in their weekly purchase order (PO) tasks after adopting a collaboration solution.
Efficiency Builds Flexibility
It’s all about the “now.”
When changes occur (as they always will), how soon will buyers know? Will they wait hours or days to finally see that email the supplier sent? Do they have to sift through huge spreadsheets looking for the change? Is the ERP data correct?
Without a collaboration solution, these challenges alone can make it incredibly difficult to forecast, allocate resources, and enact strategy. The information delay is simply too crippling.
However, when buyers and suppliers communicate in real time about changes and potential disruptions, buying teams can quickly determine options and make adjustments. This flexibility is a huge boost to cost savings and profitability – one of the most important benefits of supply chain collaboration. You’re less likely to buy excess inventory.
In the event a supplier experiences a delay or disruption, you can look to a secondary supplier who can deliver parts when you need them. And, the reduction in weekly PO management tasks makes a huge impact on labor costs.
Flexibility Reduces Costs
Speaking of costs, let’s talk about them. As mentioned above, buyers experience a very significant reduction in their clerical workload through collaboration. What previously took hours now takes about 20 minutes over morning coffee.
Buyers all over the country are burned out, working long hours that take up their evenings and sometimes even weekends. If they stay in these situations, they are more likely to jump ship and find a better situation at another company. Replacing a seasoned buyer is nearly impossible, and the replacement cost is almost incalculable.
Protect your most important asset—your people—by giving them the solution they need to accomplish their work simply and quickly, without the grind of dozens of hours of clerical work.
Collaboration also reduces inventory costs and protects cash flow. Since the onset of the pandemic in 2020, manufacturers all over the world have been carrying extra inventory so they can avoid costly delays and bottlenecks on the production floor. This is an expensive approach.
Buyers and suppliers should collaborate in real time on every last PO line change, acknowledgment, and shipping update. Then you can forecast inventory more accurately and enact more sound inventory strategies. Reduced cost for inventory and labor is one of the most impactful benefits of supply chain collaboration.
Collaborate, Collaborate, Collaborate
The more you can keep buyers and suppliers on the same page, the more you will see the benefits of supply chain collaboration. Give them clear, easy communication within the context of every PO. Give them flexibility so they can work efficiently, and let their efficiency lead you into new cost savings.
The benefits of supply chain collaboration are too great to ignore. Don’t let poor communication with suppliers put a bottleneck in your supply chain processes. Reach out to us today to schedule a demo and see how SourceDay can help you prevent future supply chain disruptions.