What is a collaborative supply chain?

October 16th, 2013

In fact, what is collaboration in general as it applies to procurement?

Todays post is by Ron Southard, CEO at SafeSourcing.

The fact is that internal collaboration is not happening in many companies and neither is collaborative aggregation.

We often hear the term collaboration or collaborative partners, collaborative supply chains, collaborative commerce or collaborative networks when we are discussing the supply chain. It rolls of everyone’s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity. According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and, an aggregate is a collection of items that are gathered together to form a total quantity.

Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.

Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group’s or companies within a larger organizations to drive economy of scale in purchasing.

The unfortunate truth is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.

If you’d really like to understand how collaboration and aggregation can be used in your company to drive down costs and improve quality, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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