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translate multiple data formats, adding to their complexity and further limiting their appeal. In short, the world was not ready for the richness of technology available. As a result, many of the early B2B portals were simply databases for pushing information. Company A would publish data to a site and then notify Company B that the information was available or assume that Company B would check the site on a regular basis. Company B would view the information, download it to its own system, and choose whether or not to take action. In effect, the Internet became an expensive, sophisticated enabler of electronic data interchange (EDI). The most common application became online auctions for buying and selling products and materials. Why Because these applications didn t demand the systems and data integration needed for true collaboration. After the dot-com collapse, many collaboration tools addressed a narrower focus supply chain execution rather than long-term planning. This narrowed focus mitigated the risk of information sharing, helped automate many manual processes, and allowed companies to work in real time. Today s collaboration tools focus on supply chain event management and on Today s collaboration relationships between customers and suppliers. As technology advances and comtools focus on supply panies become better prepared for the rigorous data maintenance needed for supchain event ply chain collaboration, the promise of management and on these new applications may soon become a reality. It s important to use these tools senrelationships sibly. While they can improve the flow of between customers information and aid decision making, they can t compensate for suboptimal processes and suppliers. or the expertise of a seasoned supply chain professional. A good collaborative system can gather data and make recommendations based on a predefined set of business rules, but it can t gauge the applicability of those rules to the current situation or calculate the effect of an inappropriate demand on a supply chain partner. Nonetheless, technology is a critical element of most coordinated and synchronized collaborative relationships and many cooperative relationships. Remember that technology is an enabler, not the driver of success. To make your technology investment pay off, make sure that your organization is set up to leverage it. This may mean changing your organization s structure, processes, incentive plans, and performance measurement.
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CHAPTER 4 Core Discipline 4: Build the Right Collaborative Model
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Involve your suppliers and customers in the selection and development of processes and systems. Or at the very least, solicit feedback from them and allow them to influence or enhance the design. Make your technology solution a foundation of service excellence not an excuse for poor service.
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Unless you re Dell or Wal-Mart, don t expect that your requests for customer or supplier collaboration will be met with an immediate flurry of positive activity. When you invite another company to be a collaboration partner, you re asking it to make fundamental changes in how it operates. The farther you go along the collaboration spectrum, the more you re asking of your partner. Only the largest and most powerful companies are in a position to force changes. Other companies must be prepared to sell prospective partners on the idea of collaboration. We ve already made the point that the goal of a collaborative relationship is to realize strategic or financial benefit. As Collaboration isn t obvious as it sounds, collaboration for the sake of collaboration is simply not worth about shifting costs the effort. Collaboration isn t about shifting from one supply costs from one supply chain partner to another. It s about setting up the supply chain partner to chain to lower overall costs and then shar- another. It s about ing the savings. This means that you must setting up the supply be willing to compromise. Avnet s Frazier sees many electronic- chain to lower overall component suppliers and contract manufacturers forced into collaborative relationships costs and then at a level that they re not prepared to sup- sharing the savings. port. It s one thing to share forecasts electronically, he notes, but when these companies are asked to do sophisticated logistics, it can be hard to take on these added tasks and still profit from the relationship. Frazier s company works with component manufacturers that prefer to sell their products through Avnet rather than directly to the end customer. Many of these companies have a hard time making money selling direct, he says. It isn t a matter of competency; it s a matter of strategy and scale. These companies are in business to sell electronic components, not to manage other companies supply chains.
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