Supply Chain Performance

What Is Supply Chain Collaboration, Anyway?

If you’re reading this, it’s likely that you’re a direct materials supply chain pro. Your work requires a LOT of communication and co-working between buyers and suppliers.

But if you’re like a lot of manufacturing businesses, these two groups struggle to work efficiently due to outdated methods. They need better tools to collaborate on orders, shipments, and other resources. What is supply chain collaboration? Put simply, it’s planning and executing supply chain operations between two organizations.

Supply Chain Visibility

Supply chain collaboration starts with visibility into these key areas. To work closely, buyers and suppliers must start with a single solution that shows every last purchase order (PO) line change. That solution must automatically match invoices with POs, shipping information, and inspection information. We call this 4-way matching, and it is critical that your teams don’t have to do it manually.

An automated solution brings matching, PO and shipping data, and every other aspect of the direct materials process together under one umbrella. Data is automatically updated in the buyer’s ERP, and every stakeholder has a direct line-of-sight into all the information they need.

What is supply chain collaboration? It’s shared visibility into every relevant piece of data. It’s working together with the same information so that decisions can be made quickly and confidently. 

Supply Chain Communication

Visibility is the first step, and communication goes hand-in-hand. Many direct materials supply chains and their suppliers are forced to rely on emails and spreadsheets to communicate urgent information.

Over half of all POs will change at some point. Think about that the next time you wait hours or even days for an acknowledgment. Think about it the next time buyers have to manually enter critical data into your ERP.

What is supply chain collaboration? It’s clean, clear communication, within the context of every invoice, PO, and line change.

Notifications are sent directly to each user, and buyers can manage by exception—rather than combing through hundreds of spreadsheet lines. Those are essentially wasted hours that could be spent thinking and working strategically to allocate resources, forecast, and keep supply flowing efficiently. With supply chain collaboration, buyers can manage 200,000 lines every day—in about 15 minutes.

Supply Chain Performance

Speaking of efficiency, let’s talk about collaboration and performance. When we ask, What is supply chain collaboration? What are we really asking? What we mean is, How do buyers work alongside suppliers to hit their goals, increase profitability, and keep supply moving smoothly?

All of these long manual processes gum up the works, creating bottlenecks on both ends. When data is inaccurate or outdated, decisions suffer. When buyers wait hours or days for acknowledgments, they are lost in the dark.

Buyers and suppliers must be able to align goals and objectives so they can work quickly and efficiently. Ultimately, the goal of supply chain collaboration is to increase efficiency, reduce costs, and improve on-time delivery. With a collaboration solution like SourceDay, materials and information flow between companies and both sides see a performance boost. 

This means better lead times, inventory levels, customer satisfaction, and supply chain agility. When you’re agile, you improve resilience when disruptions arise (as they always will). Supply chain collaboration also allows organizations to diversify their supplier base, which improves resilience in the face of those disruptions.

Many buyers focus their efforts and attention on a small subset of suppliers who offer the best price. This is also because onboarding new suppliers and getting them up-to-speed can be a huge hassle because their systems don’t align. With a collaboration solution, suppliers are brought into the fold quickly, and they can immediately begin working alongside buyers to deliver supply quickly. 

What is supply chain collaboration? It’s agility and resilience. It’s communication and clean data. It’s improving performance by bringing everyone together. 

Agility and resilience are critical to managing your supply chain in uncertain times. Learn more about SourceDay and how we can help you create a more agile supply chain by getting in touch with our team today.