For trading partners just beginning collaborative relationships, success is likely to be greatest when all parties start with basic opportunities then parcel changes into easily digestible chunks before implementing as fast as possible. With runs on the board enterprises have greater freedom to adopt more advanced collaboration such as supply chain personalisation, product design or optimisation "on the fly". But achieving supply chain efficiencies also means looking at things more holistically, says Dawson Consulting managing partner Philip Cryer. Cryer stresses that organisations must conceive of the supply chain as running all the way from the goods the consumer touches right back to the manufacturer. "That's because the way the consumer interacts with a retail environment will drive the level of demand for goods. The supply chain must be set up to react to those demands," he says.
Dawson Consulting's work across traditional supply chains points to a level of disconnectedness in conducting even the most fundamental and long-standing processes. Cryer says that rather than being designed holistically, most supply chains have evolved on a piecemeal basis with a legacy of process and technological introductions layering ever-increasing complexity and cost. Taking a more holistic view of the optimum supply chain re-established under a common vision has the potential to allow significant savings. "The work we have undertaken in collaboration has pointed to a number of potential areas for either fundamental change or early wins. We have found that these can occur by leveraging across traditional supply chain relationships as well as non-traditional relationships," says Dawson Consulting strategy adviser David Anderson.
Dawson Consulting claims to have used collaboration to deliver efficiencies in four areas: efficient ordering, paperless supply chain, efficient storing and picking and efficient delivery. It points to the example of one of the most advanced supply chain collaborators, Procter & Gamble Company (P&G). As a leader in the field of collaboration, P&G has worked hard to develop efficient ordering with key customers - especially with Wal-Mart - as a way of releasing upstream efficiencies in the supply chain. P&G is notified every few hours by Wal-Mart as to how many SKUs of products have been sold by store. This information goes all the way back to some of its key suppliers - particularly labelling and packaging - and in some cases the makers of ingredients that go into the soaps and detergents. As a result, the entire supply chain has saved millions in cash related to inventory. Beyond these basics there seems no shortage of opportunities for more advanced forms of collaboration, Dawson Consulting claims. P&G has recently started on an ambitious program to fully implement a complete standard for collaborative planning, forecasting and replenishment (CPFR). This will organise all relevant forecasting and demand data that is collected by retailers and made available to suppliers over the Net. P&G will roll out this system to all retailers and expects to reduce cash investment related to inventory by an additional $US4.5 billion or a 50 per cent savings.
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