Effective collaboration with supply chain partners requires that your partners exchange transactional data such as:
- Purchase orders, work orders and sales orders
- Point of Sale information
- Credit and debit notes
Level 2: Supply chain management information sharing
EDI, the internet or proprietary tools are used at this level to give partners information that helps them make the decisions.
Types of information being shared include:
- Production or component forecasts
- Production and transportation plans and capacities
- Bill of materials (BOMs)
- Product description
- Prices and promotions
- Product and material availability
- Services levels
- Contract terms such as supply capacity, inventory and services
Level 3: Strategic collaboration
At this level you and your partners are taking part in joint planning, process redesign as well as sharing some level or risk and reward. You will be making collaborative decisions on issues like:
- Improving the accuracy of forecasts.
- Strengthening strategic supply relationships and profitability
- Enhancing sales and operations planning
- Accelerating and managing demand plans, direct material procurement and fulfilment throughout the supply chain.
- Product capacities
- Production facility and fulfilment network expansion
- Pricing plans
- Technology to be used
- Mode of transport
Benefits of supply chain collaboration
- Lower inventory levels and higher inventory turns.
- Lower transportation and .warehousing costs.
- Lower out-of stock levels.
- Short lead times.
- Improved customer service metrics.
- Visibility into customer demand and supplier performance.
- Earlier and quicker decision-making.