Blog Challenges of Supplier Collaboration

Challenges of Supplier Collaboration

supplier collaboration

As procurement leaders know, supplier collaboration can bring enormous returns in the form of cost savings and strategic advantage. However, it is a complicated initiative that requires significant time and commitment from both companies and can be difficult to execute in a way that delivers the desired outcomes. The key to success is ensuring that supplier collaboration aligns with both the company’s overall business strategy and the goals of procurement.Go

Getting this alignment right starts with the right stakeholder group. A well-structured program includes representatives from R&D, supply chain, and commercial functions to ensure buy-in and support across the organization. It’s also important to clearly communicate the value of the initiative and the investment required, both in terms of resources and time.

The Power of Partnership: Transforming Business through Effective Supplier Collaboration

In addition to the usual challenges associated with a long-term initiative, one of the most critical barriers is the tendency for participants to get distracted by other priorities and drift away from their participation. This can be mitigated by frequent, compelling communications that illustrate progress and the importance of their efforts.

The final challenge is establishing the appropriate level of trust. Unlike most other procurement initiatives, supplier collaboration involves sharing highly sensitive and proprietary information. This can include technology and product design, which are often considered strategic assets for the buying company. Keeping this in mind, it’s important to select a supplier who will be willing and able to share these assets with the buyer. It is also important to establish a high-level, cross-functional team to manage the program and to invest in a collaborative technology solution that supports project based activities with clear goal setting functionality and systematic governance.

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