SUPPLY CHAIN

LOGISTICS
ADMINISTRATION
Collaboration
Supply chain collaboration is a common practice in the supply chain industry. It occurs when
different autonomous firms collaborate or team up to execute supply chain tasks and
operations.

Collaboration is a cooperative strategy because two or more business units cooperate to

realize mutual benefits. Collaboration can deliver substantial benefits to collaborators
because different autonomous firms come together to fulfill supply chain tasks.
Here are two common types of supply chain collaboration – vertical and horizontal.

 Vertical collaboration strategy allows two or more businesses in different supply chain stages to
share their responsibilities. For example, when a buyer forms relationships with several suppliers or
vendors.

 Horizontal collaboration brings together two or more enterprises at the same level of the supply
chain to optimize cost and share the burden of demand. For instance, when multiple manufacturers
decide to share the delivery infrastructure of their raw materials.
Benefits supply chain collaboration provides

Partner Retention and Supply Chain Talent

Companies see supply chain collaboration as a gold standard for capturing the top talent. The need for
collaboration is because businesses understand the importance of customer retention – and the level of
competition vying for customer trust and brand loyalty.

According to the Global Supply Chain Institute, supply chain talent management is inarguably the most
unique of all business requirements. And identifying, recruiting, and retaining talented supply chain
managers is the farthest-reaching goal of collaborative efforts. Collaborations yield better talent and
enable enterprises to access top supply chain talent.
Lowering Long-term Costs

One-off collaborations have their place in your supply operations. However, long-term partnerships affect
the bottom-line most adversely. The benefits of cooperation are long-term and practical. More clearly, the
longer you collaborate, the better you understand each other’s weaknesses, strengths, and working
methods. This mutual collaboration ensures that you are better at playing to each other’s strengths.

For instance, by retaining suppliers, you increase the possibility of streamlined communication and
collaborative experience with them. You forego the extra cost and time to repeatedly learn a supplier’s
habits, standards, and operations. When you’re familiar with another supplier’s management process and
operational specifics, you can close costly gaps easily and quickly.
Product Quality and Safety

Delivering high-quality, safe products is the secret formula for customer satisfaction; and something
aspired by every retailer and brand. Collaborating with a supply chain partner gives you a deepened
perspective of the issues facing product safety and quality in your industry – be it raw materials or new
regulations on waste management.

What’s more, working together with your collaborators to eliminate these problems produces faster and
more efficient results than each party trying to work alone. Your business, customers, and the entire
industry will benefit from robust collaborations. Collaborating in as share a digital platform analyses quality
and compliance data, giving you a 360-degree view of your supply chain operations.
Better, Ethical Standards

Ethical, sustainable sourcing practices are currently a priority for most enterprises. But, no matter how
committed you’re to improving environmental welfare and human rights, one entity can only do so much.

Indeed, it’s universally known that multi-stakeholder collaboration is key to driving change in supply
chains. Collaborating with a trusted supplier allows you to strive towards supply chain transparency, thus
promoting higher environmental and ethical standards. Partnering with suppliers enables you to exert
leverage over other areas of your procurement that are most resistant to change.
Logistical organization

Logistics companies provide logistical solutions to other organizations. Specifically, these services involve the
management of freight, warehousing and inventory management. Businesses often outsource certain
functions to logistical organizations to lower costs and increase the efficiency of their supply chains. Logistics
companies are usually third-party logistics service providers and specialize in a specific area of logistics.

Logistics Companies

Logistics as a business results from the increasing complexity of supplying manufacturers with materials and
shipping out goods. Logistics companies generally specialize in the transportation, distribution, storage and
packaging of products. Manufacturing companies often use external organizations to execute logistics
functions. This allows manufacturers to focus on the core business of manufacturing. Manufacturing
companies often require some logistics machinery to function properly, but they may outsource many of the
logistics functions not directly associated with manufacturing activities.
Third-Party and Fourth-Party Logistics

Third-party logistics is the outsourcing of the logistics function to external organizations. For example, a
business that has its own warehousing facilities may use a third-party logistics provider for transportation.
Fourth-party logistics companies, on the other hand, design and implement a comprehensive supply-chain
solution for an organization that typically includes the use of a number of different third-party logistics
providers. While a third-party logistics organization performs a specific logistics function, a fourth-party
logistics company uses its resources and capabilities to manage the entire logistics process for clients.
Development of collaborative relationship

It is important to have a clear and good relationship when having a collaborative effort here are some steps
To have a good collaborative relationship effort.

◦ Start With The End in Mind– being clear on what you would like to accomplish opens the opportunity for
you to seek out the right resources and collaboration partners who can help you achieve this. Ensure that
these partners are aligned with your values or else a cultural mismatch could result which could provide
very costly at a later date.

◦ Be Open To New Opportunities– when people collaborate a new energy is created which is bigger than
the sum of the parts. New ideas flow which can result in projects way bigger than what you initially
envisaged.

◦ Share a Common Vision– both parties must essential have a shared vision for the project. When the
project vision’s diverge then one party will usually become disgruntled which doesn’t make for an
effective working relationship.
◦ Be Clear On Roles and Responsibilities – knowing what you are committing to in the collaboration is key. Work to
your strengths and have clear action plans so everyone knows what they are doing by when. Recognize that others
work in a different way from you and be flexible to accommodate other working practices

◦ Lay Out The Ground Rules– having clarity over the ground rules such as time and money commitments is
paramount. This needs to be done upfront or else it creates animosity at a later stage when confusion emerges
about how profits are to be split. Never assume that because you are collaborating everything is being shared
50:50!!!

◦ Communicate Clearly– being able to express your feelings, doubts and concerns is healthy in any relationship and
collaborative relationships are no different. Each party must feel able to say what is on their mind. Always listen
carefully to what your collaborative partner doesn’t say as this is where you might find the real gold in your
conversations.

◦ Collaborate With People You Like – there are so many collaborative opportunities out there so please make sure
you choose a collaborative partner that you like and can have fun working with. The energy dynamic needs to be
positive and engaging to attract clients and if it isn’t then success will be much harder. After all, typically we are
engaging in a collaboration to leverage resources and so make work more effortless, not harder.
Relationship management

Supplier relationship management (SRM) is a systematic approach to evaluating vendors that supply your
organization with goods, materials and services. It’s one of the pieces that fall under the larger umbrella of supply
chain management and is a key component to business success.

Goals of Supplier Relationship Management (SRM)

Every industry and business has its own definition and categories of what classifies as a strategic supplier, but the
main goals of supplier relationship management are largely the same throughout.

Develop Supplier Relationships

This is the bread and butter of any supplier relationship manager. Figuring out which suppliers are critical to
business success and which aren’t, and then managing based on that scorecard is essential.For instance, an
electronic company’s supplier of microprocessors is much more critical—and therefore strategic—than their
supplier for paint.To that end, a manager has to create a mutually beneficial relationship for both sides to create
value.
Performance Management
The main objective of performance measurement is to provide valuable information which allows
firms to improve the fulfillment of customers’ requirements and to meet firm’s strategic goals. It is
therefore important to measure how effectively the customers’ requirements are met and how
resources are efficiently used to reach a certain level of customer satisfaction. Supply chain
performance measurement is used to evaluate the effectiveness and efficiency of organizational
structure, processes and resources not only for one firm but also for the entire supply chain.
Supply Chain Controlling

One of the main tasks of supply chain controlling is to implement a common knowledge and understanding of
the processes in the whole supply chain. The phrase ‘supply chain controlling’ indicates the construction and
steering of the interactions within the whole supply chain by using adequate controlling concepts.

The objectives of supply chain controlling can be divided into direct and indirect objectives. The direct
objectives focus on the performance measurement of processes and resources, while the indirect objectives
concentrate on more strategic objectives, such as competitiveness or gaining market shares.
Supply Chain Monitoring

Theory states that the performance of supply chains should be monitored providing cost measures and non-
cost related measures. The central concept to monitor the supply chain and achieve higher visibility is called
supply chain monitoring. Supply chain monitoring is defined as the effort of actors in a supply chain to manage
and control visibility of information regarding flows of products and services in different levels and directions in
a supply chain. The central key of a supply chain monitoring system is the exchange of information in form of
standardized data between all the participants of the chain.

Therefore supply chain monitoring focuses on sharing information and data among the entire supply chain,
while supply chain performance measurement is directly connected with specific goals, such as achieving
effectiveness and efficiency. In general it can be seen that the three approaches of supply chain controlling,
supply chain performance measurement and supply chain monitoring build up on each other.
Internal Supply Chain Performance Measurement

Internal supply chain performance measurement primarily focuses on such measures as lead time, fill rate or
on-time performance. These measures are generated within a company and do not evaluate the whole supply
chain. It is for this reason why this literature seeks to address performance measures holistically and not
restrictive to logistics performance measures. Taking only one company into account can lead to situations
where seemingly good measures lead to inappropriate outcomes for the entire supply chain.

The central roles of these internal supply chain performance measurement systems are measuring the
performance of business processes, measuring the effects of the companies’ strategies and plans, diagnosing
of problems, supporting decision-making, motivating improvements and supporting communication within a
company.
External Supply Chain Performance Measurement

Performance measurement systems are seldom connected with overall supply chain strategies, lack balanced
approaches to integrate financial and non-financial measures, lack system thinking and often encourages local
optimization. Due to increasing requirements of supply chain management it is necessary to explore suitable
performance measures and how accurate performance measurement systems can meet the need of support in
decision-making and continues improvement in supply chains.

Taking these challenges and the fact that more and more firms recognize the potential of supply chain
management into account, it becomes obvious that there is much request for supply chain performance
measurement systems for the supply chain as a whole. The existing performance measurement systems in
supply chain environment often fail to fulfill the needs due to the different vertical and horizontal influences in
supply chains.
Thank you!!