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Will Technology Boost Collaboration?

By William DiBenedetto, CBN Feature Editor

It seems a no-brainer that collaboration is, or should be, a key ingredient when it comes to the effective operation of a supply chain.

In the world of transportation and logistics however, collaboration is more buzzword than reality. Just spend five minutes looking at the constant rate gyrations that ocean carriers and shippers go through and one realizes that true collaboration is virtually non-existent. And last year’s West Coast port-labor showdown was a prime example of collaborative failure both operationally and in dealing with risk — even when it was in the best interests of everyone to do so.

Research and analysis puts collaboration at the top of the logistics to-do list. It’s becoming clear that as technology advances, Big Data and cloud-based applications can help the situation.

The Ethical Corporation’s look at "Sustainable Supply Chain Trends 2015" says industry collaboration is the "single most exciting opportunity" in relation to global supply chain sustainability in 2015 and 2016.

Bob Heaney, Aberdeen Group’s Research Director, Supply Chain & Retail Practices, said that as cloud-based transportation solutions "continue to grow in relevance and popularity," transportation companies are responding by optimizing dock scheduling, domestic transportation and financial settlement activities.

Not only do they have to coordinate across each of those nodes, Heaney says, "They must collaborate tightly with their customers, suppliers and carriers to truly be successful during execution." The Aberdeen report notes that up to 92 percent of chief supply chain executives say they are looking at cloud-based collaborative solutions. And more than 75 percent of companies responding to the Aberdeen survey said that internal/external collaboration is integral to optimizing dock and transport processes for customers and stakeholders.

New logistics IT formats require an understanding of cloud-based requirements when linking visibility, financial and landed cost, and cost-to-serve components, Heaney says.

The increasingly complex nature of supply chains means that disruptions are also increasingly more common. According to a report from Amber Road, "Collaboration addresses supply chain risks by avoiding, controlling and evaluating all risk factors across the global supply chain."

Supply chain disruption can be caused by everything from political unrest to extreme weather, or even a lack of communication between internal teams and external partners. "The key to insulating your supply chain against costly delays, or failures, can be found through software solutions and process changes," according to the report "How Collaboration Reduces Your Global Supplier Risks."

Implementing a robust collaborative software platform and "consolidating data from your external systems results in the ability to buffer your supply

chain operations from all major risk factors." Nearly 70 percent of executives "lack the information they need to manage effectively because employees withhold vital input out of fear that doing otherwise will reflect poorly on them," the study continues. Use of collaborative technology and processes improves visibility and shares risk-related information across the entire supply chain, thus distributing the risk control.

Closely linked to a collaborative risk management system is the implementation of agility across the supply chain. Agility and collaboration go hand in hand to mitigate risk when dealing with customers, factories, and other key parties in different languages and time zones.

According to data from Gartner and ARC research, over the past decade companies have collectively spent billions of dollars on PDM (product data management), ERP (enterprise resource planning), TMS (transportation management systems), WM (warehouse management systems) and other "Big Data" programs.

But in order to effectively use the information from these existing applications, new classes of software are needed. Gartner states that a growing percentage of enterprises eventually will rethink their supply chain execution software portfolios, and adopt "cross-functional platforms" that support integrated, end-to-end business processes.

Software that collects and shares information from multiple technology sources and service providers will make it easier for organizations to access the information across supply chain trading partners. This technological collaboration can include suppliers across every tier of the supply chain.

And according to the 2016 Third-Party Logistics Study, which looks at the state of logistics outsourcing, relationships and collaboration are more important than ever because competition is "ramping up due to tightened capacity along with increased consolidation within the supply chain arena." This has resulted in fewer partners for 3PLs and increased prices.

"The spirit of collaboration with 3PLs and shippers has led to increased efficiencies in the supply chain," said Bob Daymon, vice president of transportation management for Penske Logistics. "Enhanced relationships with shippers results in operational costs savings and ensures reliable coverage and better rates."

A collaborative supply chain is an agile supply chain, and vice-versa. It’s simple to say, but hard to implement. Will technology be the tipping point that makes it happen?