The 7 habits of highly effective supply chain collaborators
A research report from the University of Tennessee identifies seven ways to improve your company's chances of creating value from your supply chain collaboration efforts.
We have all heard about the benefits of collaborating with your supply chain partners. And yet, it is still something that most companies struggle to do effectively. To help, the University of Tennessee, Knoxville, which has one of the most well-respected supply chain programs in the United States, has released a white paper that details some of the best practices for supply chain collaboration.
"End-to-End Supply Chain Collaboration Best Practices" by The Global Supply Chain Institute at the University of Tennessee is based on interviews with 17 companies across eight industries that faculty members considered innovative in the area of collaboration. Based on those interviews, The Global Supply Chain Institute has identified seven collaboration best practices. These include:
1. Make collaboration a priority. Supply chain executives need to make effective collaboration a priority—internally as well as externally—and they need to communicate this priority through one-on-one discussions, leadership meetings, performance reviews, organizational information meetings, monthly scorecard reviews, and strategic action plans, according to the report.
2. Develop leaders that have experience across the entire supply chain. According to the report, in order for supply chain executives to effectively drive collaboration, they need to understand the entire supply chain from end to end. A company can develop that type of leadership by making sure its top talent participates in many different types of supply chain assignments and projects that span the supply chain —from working with their supplier's supplier to product consumption.
3. Create a collaboration culture. Collaboration can take a lot of open-front work and may require some major cultural shifts, according to the report. Leaders need to recognize that collaboration can go against the supply chain department's short-term goals and may require changes to the department's performance scorecard and metrics. To ensure that a collaborative atmosphere sticks, leaders need to model collaborative behavior in every visible activity from how they solve problems, to how they set pay and benefits, to how they behave during top-level sales and operations planning meetings, and who they invite on facility tours.
A collaborative culture can also be built by trusting your partners first instead of expecting them to earn that trust. In other words, believe that other disciplines, functions, and partners will do their job the right way until there is an issue. Then when there is an issue, work to fix the trust problem.
4. Create business and supply chain measures that are based on total value. Most companies' supply chain scorecards measure safety, cost, quality, reliability, and customer service. The University of Tennessee paper recommends that scorecards should also include a value assessment for inventory, quality, and responsiveness. It should also evaluate the value of time such as overall supply chain time, material cycle time, production cycle time, and new initiative launch timing. These measures should be developed in partnership with finance leadership and should rely on activity-based costing, according to the paper's authors.
5. Make sure everyone has the collaboration tools, systems, and data they need. To collaborate, partners need to have access to the same easy-to-understand data. This might require making sure everyone has access to the same data-sharing tools and agreeing on using the same definitions for particular measures. Additionally, partners will need systems and tools that enable collaboration. This may require not only having virtual tools, such as software systems and artificial intelligence, but also having established processes and procedures such as monthly reviews, project meeting structures, meeting spaces, and facility tours.
6. Develop a robust structure for creating external collaboration teams. Organizations can benefit from having a standard operating procedure for collaborating with external partners. Such a procedure might include using a segmentation process to determine what level of collaboration (if any) is required for each partner. (For example, organizations will collaborate more with strategic suppliers of high-cost materials or services than they would with suppliers of low-cost commodities.) Once the company has determined the level of collaboration, the procedure may require top-to-top meetings between partners to discuss how to align and approve the work. The next step may be to make sure the team has what it needs to do the work (such as proper staffing and facilities, confidentiality agreements, and budgets).
7. Have an effective sales and operations planning (S&OP) process. The paper argues that, "businesses with an effective S&OP process deliver better results than those without it." That's because when demand and supply integration is done correctly, all parts of the business focus on the benefit to the total enterprise as opposed to functional rewards or cultural systems.
While all of these seven practices are important, the paper stresses one key point: Companies should not pursue collaboration just for the sake of collaborating. Instead like all important supply chain initiatives, they must make sure that there is a clear return on the investment. In other words, the collaboration must create value.
Organizations are working to make their supply chains more resilient to disruptions and responsive to abrupt market changes, the firm said in its “2024 ISG Provider Lens Supply Chain Services” report for the U.S. In the wake of major geopolitical events that have affected supply chains, including international conflicts and the COVID-19 pandemic, companies are seeking to prevent or quickly bounce back from supply or demand shocks.
U.S. companies in particular have been especially fast to adopt digital supply chains, due to lighter regulation in the country and a higher willingness to take technology risks, ISG says. Many U.S. firms are also undertaking digital transformation as they shift from global to regional or local supply chains to reduce the risk of future disruptions.
A top goal for U.S. enterprises is aiming for more real-time insights and data-driven decision-making, prompting them to clean up and integrate data from throughout their supply chains, including from both internal systems and external suppliers, ISG says. End-to-end visibility and process orchestration could improve supply and demand forecasts, order fulfilment and profitability. Providers are helping clients carry out this major transition, usually in one part of the supply chain at a time.
“Cost is still a concern for supply chains, but capability is gaining importance,” Bob Krohn, partner, manufacturing, for ISG, said in a release. “Service providers are stepping up to help enterprises implement systems that meet their unique requirements.”
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Gulf Coast businesses in Louisiana and Texas are keeping a watchful eye on the latest storm to emerge from the Gulf Of Mexico this week, as Hurricane Rafael nears Cuba.
The category 2 storm’s edges could also brush Florida as it heads northwest, causing tropical storm force winds in the lower and middle Florida keys. However, the weather agency said it is too soon to forecast Rafael’s impact on the U.S. western Gulf Coast.
In the face of campaign pledges by Donald Trump to boost tariffs on imports, many U.S. business interests are pushing back on that policy plan following Trump’s election yesterday as president-elect.
U.S. firms are already rushing to import goods before the promised tariff increases take effect, to avoid potential cost increases. That’s because tariffs are paid by the domestic companies that order the goods, not by the foreign nation that makes them.
That dynamic would likely increase prices for U.S. consumers as importers pass along the extra cost in the form of price hikes, according to an analysis by the National Retail Federation (NRF). Specifically, Trump’s tariff plan would boost prices in six consumer product categories: apparel, toys, furniture, household appliances, footwear, and travel goods. “Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” NRF Vice President of Supply Chain and Customs Policy Jonathan Gold said in a release. “A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”
The rush to avoid those swollen costs can already be measured in the form of rising rates for transporting ocean freight, as companies start buffering their inventories before the new administration officially announces tariff hikes. Transpacific rates are still $1,000/FEU or more above their April lows, showing increased ocean volumes and climbing rates generated by shippers’ concerns about supply chain disruptions including port strikes and the Trump tariff increases, supply chain visibility provider Freightos said in an analysis. "The Trump win may start shaking up supply chains even before he takes office. Just the anticipation of higher tariffs may lead importers to pull forward shipments, creating a preemptive freight frenzy," Judah Levine, Head of Research at Freightos, said in a release. “Frontloading will cause freight rates to feel the heat as importers race to dodge the extra costs, similar to what took place with Trump’s tariffs on Chinese goods in 2018 and 2019."
Another group sounding a note of caution about international trade developments was the Global Cold Chain Alliance (GCCA), a trade group which represents some 1,500 member companies in more than 90 countries that provide temperature-controlled warehousing, logistics, and transportation. “We congratulate President Trump on his election. We also congratulate all those who have been elected to the U.S. Senate and House of Representatives,” GCCA President and CEO Sara Stickler said in a statement. “We are also committed to promoting the growth of exports from U.S.-based food production and broader manufacturing sectors. We will engage constructively in the policy discussion about future trade policy and continue to make the case for the importance of maintaining balanced and resilient trade routes for food and other temperature-controlled products across the world.”
Businesses in the European Union (EU) were likewise wary of tariff plans, judging by a statement from the VDMA, a trade group representing 3,600 German and European machinery and equipment manufacturing companies. "Donald Trump's second term will be a greater challenge for German and European industry than his first presidency. We must take his tariff announcements seriously, in particular. This will once again put a noticeable strain on transatlantic trade and investment relations," VDMA Executive Director Thilo Brodtmann said in a statement. “The USA is and will remain the most important export market outside the EU for mechanical and plant engineering from Germany. Our companies offer the products required to implement the re-industrialization of the USA that Donald Trump is striving for. The VDMA's overall outlook for the American market therefore remains positive."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."