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to fit on a pallet or in a shipping container. Sometimes, a very small adjustment in the packaging dimension can make the difference between fitting 200 units on a pallet or fitting 250. This sounds like an easy change to make, but at Logitech, decisions about the look and feel of packaging are the domain of marketing, not the supply chain group. As Perry notes, Everyone understands the need to keep operations costs low, but not if it means the products don t sell as a result. Not only that, but once a product has been sold in a particular package, it is very difficult to modify the design. Retailers see a packaging change as a whole new product, says Perry, so they may want to exchange anything they already have on hand for the updated version of the product. That can be extremely expensive for us. We need to get it right the first time and that wasn t always happening. The process for packaging design was never intended to be serial, with a handoff from marketing to the supply chain group after the design was finalized; it just evolved that way. The solution for Logitech was close collaboration between the supply chain and marketing functions and early involvement of the supply chain group in the product development process. It also meant compromises on both sides. Our job is to take the desired packaging design and find the most cost-effective way to source and distribute it, says Williams. It isn t to second-guess the design. But we want the marketing team to be open to making concessions that can make distributing the product more efficient. 4 A focus on collaboration between the marketing and supply chain organizations resulted in packaging that allows Logitech to get products to customers as efficiently as possible while remaining a reflection of the innovation and quality of the products within.
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Define the Appropriate Degrees of Collaboration (i.e., Segment)
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A world in which your company is tightly linked to all its supply chain partners customers and suppliers alike is highly appealing but virtually impossible and not likely to be very cost-effective. Intensive collaboration is complicated, challenging, and costly, requiring a major investment in resources, processes, and systems. Moreover, not all customers are equally profitable and not all suppliers are equally valuable. And many potential partners may not be capable or even willing to support the level of collaboration you want. Therefore it makes sense to segment your partners before embarking on a collaboration program much like marketing professionals segment their target customers.
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CHAPTER 4 Core Discipline 4: Build the Right Collaborative Model
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This means deciding on a segmentation approach. No doubt you have a list of customers, suppliers, or commodities that you consider key or strategic. But what factors cause you to label them as such Size of company Price of materials or services Their dependence on you or you on them as a buyer or supplier Their value to you in terms of revenue generation Segmenting supply chain partners is critical to effective collaboration. No matter how much or how little value they contribute to your company, all potential partners have an appropriate place along the collaboration spectrum. Basing your decision of whom to collaborate with on a simple ranking of who your most valuable suppliers, service providers, and customers are is inherently risky.5 A better approach is to consider several partner-selection criteria weighted according to your specific needs:
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Strategic importance. How essential are the potential partner s size, business volume, technology, expertise, materials/ components, or market position Cultural fit. How compatible are your people and values, and how well will you work together Are you equally committed to the relationship, even though business conditions may change Is there mutual trust Organizational fit. Can the partner respond quickly and fully to requests for information and materials Is the partner flexible enough to adapt to changes in demand or supply Are the roles and responsibilities in place for managing a long-term relationship Technology fit. Are your systems compatible and easily integrated Do you have the same degree of technical sophistication Are you equally willing to share technologies and innovative solutions Can your partner provide accessible, integrated data
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Choosing partners is made much more complex by the need to assess the selection criteria along two dimensions: the category of relationship (customer, material supplier, or service supplier) and collaboration type (transactional, cooperative, coordinated, or synchronized). The best approach is to create an assessment framework before approaching any partners. Start by listing the conditions that a partner must meet to be considered for each collaboration type. To make sure that you re being objective, develop criteria that are clear and unambiguous. Know how many partners of each type you want to have, based on the needs of your business or previous experience with collaboration. Then
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