- Suppliers who are willing to invest in technology that will benefit the buyer are more likely to be trustworthy in later transactions.
- Some of the barriers to supply chain collaboration include lack of data availability, few tools to enable collaboration, and lack of knowledge on how vendors and retailers can collaborate effectively.
- Constant collaboration and communication, facilitated by modern technology tools, can dramatically improve agility and responsiveness, data sharing, and overall performance.
Why trust and collaboration are important in the supply chain
Around 80% of B2B decision-makers have changed suppliers at least once or more during the past two years. This clearly shows that disruptions and difficulty collaborating have caused problems. A company’s reaction time, which COVID has highlighted as being critical, will be more adaptable and resilient if the relationship between buyer and supplier is both collaborative and trusting.
Investing in tools that enable supply chain collaboration is more critical today for various reasons:
- The fast-pace of business requires retailers and vendors to be more agile and innovative
- Vendors are starting to be considered as strategic partners to create products that are competitive differentiators
- The need to have accurate information and data for decision-making is increasing.
Studies show that if vendors invest in technology that benefits buyers with improved productivity, reliability, and quality, then buyers are more likely to work with those vendors. In other words, if the buyer and vendor share the same motivations, then their bond of trust and their professional collaboration will both be better.
On the other hand, the data below shows how mismatched motivations and a lack of trust can negatively affect collaboration.
Due to delays or interruptions in product quality, the collaborative bond between buyers and vendors can break down, and the vendor will likely lose buyers as a result. Fortunately, these 5 ways to build better business relationships will help reduce the pressure of having to adapt to breakdowns in the supply chain.
5 Ways to Build Better Business Relationships
Collaboration always works best when both parties build transparency: The more understanding they have of one another, the stronger their sense of dependability. Transparency helps both parties see their motivations more clearly, enabling them to reduce risk and drive efficiency.
When vendors openly share information with their buyers, they build trust while demonstrating their value as strategic partners. When retailers have access to inside information, they can step in and fix or prevent defects, optimizing the supply chain based on the vendor’s motivations and needs.
Using technology to centralize data and make it easily accessible for retailers can help increase trust and improve performance within the supply chain.
Ensuring constant and effective communication and data sharing is critical for organizations that collaborate across the globe: Every part of the supply chain must work together instead of making decisions alone. Gathering and analyzing data in siloes can prevent businesses from assessing the health of their entire supply networks.
Consumers have also increased their interest in supply chain transparency, putting more pressure on companies to be able to deliver supplier information quickly and efficiently in order to look good.
Centralizing data from the supply chain’s processes will increase responsiveness and agility across all areas of the business—including quality management.
Technology makes it possible to centralize data and make it accessible to all collaborators, no matter where they’re located, so that they can optimize processes more quickly and make better decisions.
To maintain agility in the decision-making process, a company needs to have insight when it comes to the supply chain’s capabilities, machinery, and numbers. Decision-makers should know when and where to place an order, and having this data insight will enable them to optimize their process: The ability to access the suppliers’ information in real-time gives you a better understanding of how to quickly minimize risks.
Using technology to share real-time monitoring data will make it easier to build trust and reliability over time.
Modern supply chain solutions will improve speed and accuracy in gathering, interpreting, and sharing critical data to give everyone a complete picture of where collaborative relationships currently stand.
Businesses often mistakenly base decisions on old data, sharing information from the month before, but doing so slows things down. Information and data analysis must be current and meet high quality standards in order to actually help improve the balance of costs and profits.
Centralizing real-time data with the use of cloud technology makes it easier to collect information from all areas of the process and share it quickly, speeding up responsiveness.
Supply chain technology solutions can improve data gathering, quality, and analysis, making crucial information available through mobile platforms so that decision-makers can feel secure and adapt on the go.
It’s critical to maintain a complete, real-time view of the entire supply chain in order to respond quickly and collaboratively. Technology can also assist with the timely release of sensitive information to maximize trust-building between vendors and buyers. This strategic approach also helps narrow down the search for only the best partners, minimizing risk even further.
When quality management isn’t handled and optimized properly, it can raise costs without generating much visible return. Adaptive decision-makers are looking to lower the budget so that they can spend less while maximizing resources and noticeably impacting quality management. In short: It’s all about finding the key points to invest in while spending less money in less impactful areas.
Quality data can help by showing where oversight and investment are needed most, alongside pinpointing low-risk areas where they’re needed the least. Collaborating with partners in the supply chain on risk management methods will help them understand and align with company goals more effectively, reducing unnecessary spending and maximizing profits: And having the right data gathering and cloud-sharing technology will help achieve this efficiently.
- Looking towards the future, decision-makers can easily imagine how cloud-based information sharing and more technologically advanced data gathering will streamline manufacturing.
- Brands and retailers are more likely to do business with vendors that are able to provide visibility into their operations and ensure good quality.
- By connecting all links in the supply chain and using advanced data sharing to build collaborative trust between them, manufacturers can use data centralization to minimize risks and losses.
- Using technology will also allow your company to react efficiently to disruptions—all while preserving trust in relationships with others in the supply chain.