Every company’s efficiency is largely dependent on its logistics. Strategic logistics planning and a web based transport management system handle the selling and purchasing, but an unstable relationship with your supply chain partners can throw a wrench in the works. A strong supply chain is essential to a company’s growth and profitability, and good interactions are a vital component. A bidirectional relationship will result in lower shipping costs, faster travel times, and fewer miscommunications.
What is Supply Chain Collaboration?
Collaboration in the supply chain can be described as the joint efforts of independent companies to enhance the efficiency of their supply chains. Supply chain collaboration may be classified as either horizontal or vertical.
- Vertical collaboration connects two or more firms at various levels of the supply chain, boosting efficiency and performance. For example, a buyer establishes a long-term connection with one or more vendors of their products.
- Horizontal collaboration enables enterprises at the same level of the supply network to share the load of demand and save costs. For example, various manufacturers might choose to share the raw material delivery infrastructure.
Cost reductions of 5-10% and revenue increases of 7-10% are possible, depending on the industry. While the advantages of supply chain collaboration are numerous, you must be clear on your goals before approaching other organizations about establishing a relationship.
This will not only assist you in defining the particular parameters of your partnership but will also enable you to be open with possible partners about what you hope to gain from the collaboration.
Benefits Of Supply Chain Collaboration
Adaptability and Resilience
It is easier to avoid interruptions if a supply chain can adapt to variations in demand and predict and respond to problems more efficiently.
More Prompt Reaction to Customer Requests
Supply chain collaboration improves an organization’s ability to satisfy the demands of its customers by establishing efficiencies and streamlining responses to challenges.
Capacity to Promote Business Expansion
Global Supply Chain Institute claims that supply chain personnel management is the most distinctive demand for businesses. Suppliers can better understand their customers’ needs by working with internal departments like sales and marketing. This enables them to collaborate and accelerate the creation of new products.
Aligning supply chain elements through real-time data sharing and improved communication enables firms to mitigate the bullwhip impact across the supply network whenever demand patterns shift.
Efficiencies in Operation
Supply chain collaboration solutions driven by Artificial Intelligence (AI) can help enhance operational efficiency and decrease cycle times and costs by providing insights and suggestions.
Increased Prediction Accuracy
When supply chain planning and forecasting are done collaboratively, the accuracy of projections is improved, and there is greater cooperation among stakeholders.
How can you improve your relationship with your freight forwarders?
Create a Backup Plan to Deal with the Unexpected
There will be ups and downs in every sector, and the logistics industry is no exception. Planning with your freight forwarding firm for an occurrence that might harm your shipments or have an impact on your business is essential in this situation. Even though they may not be to blame, you nevertheless need their assistance in minimizing the harm.
Ship Products On Time, Every Time
Freight forwarders are able to provide better bids and handle your shipments more effectively if your shipments are consistent. The freight forwarder’s job is made more accessible and more efficient if you keep your shipment information open and accessible.
Avoid Accepting Late-Hour Shipments
A last-minute booking is almost always a bad idea. Organizing transportation in advance is difficult enough for freight forwarders; adding it in at the very end is even more difficult. Unnecessary delays and additional shipping fees will be incurred.
What can you do to improve your relationship with carriers?
Honor Your Promises
When it comes to relationships, honesty is an essential quality. Don’t forget to keep the carrier updated on all the information you provided on shipping routes, cargoes, and other relevant details.
Carriers can’t be held responsible for delivering on their half of the deal unless the shipper is prepared. Ensure that the carriers are aware of any significant changes in plans so they can plan accordingly.
Make use of technology that makes it simple for the carriers to send the data you may want from the moment your shipment departs the port to the port of delivery. A wide range of tools is available to help you grow your business and build your connections.
A company’s worth isn’t necessarily measured in statistics. It’s the people that make a substantial relationship work, not just the technology.
People that work with you need to have a firm grasp of the business and adhere to your culture. This contributes significantly to the development of healthy relationships and may be quite beneficial to your business as a whole.