Collaborating with Your Competitors: The New Supply Chain Frontier

By December 23, 2022

The global supply chain faces many pressing challenges, including shipping, inflation, inventory management, and product returns. These are only a few of the many issues we deal with daily. However, there is another major challenge we must address. Despite efforts to reduce information silos within our own companies and business ecosystems, as an industry, we’re still keeping information from each other that can take us all forward without compromising competitive advantage.

According to Fernando Moncayo, Managing Director and Co-Founder of Inspectorio, bringing your supply chain up to today’s gold standard of information-sharing happens in three stages: digitization, standardization, and collaboration. Much ink has been spilt on digitization (and with more than 60% of the industry still relying on manual processes, more needs to be spilt), and standardization is receiving increasing attention. 

However, pre-competitive collaboration — that is, collaboration among competitors to solve shared industry challenges — will define the next decade of evolution in the supply chain.

How does pre-competitive collaboration work?

“We are a very selfish industry,” Fernando jokes during an interview with Lauren Parker, Branded Content Manager at Sourcing Journal, at their recent 2022 Fall Summit. “We don’t want to share information. We don’t want to collaborate. But if we really want to achieve all of our different goals, we need to.” 

Fernando explains that organizations in the supply chain industry need to collaborate both internally and externally. Internal collaboration involves forming a symbiotic business partnership with your vendors and factories by investing in their operations and gaining visibility into their factory floor. The external stage is what Fernando calls “silent collaboration,” which is done through algorithms and machine learning, allowing companies to pool their data on network platforms to gain more robust, industry-wide insights. 

As an example, Fernando points to modern GPS apps like Waze. A couple of decades ago, drivers had to unfold large paper maps to navigate. Today, navigation apps on mobile devices autonomously contribute data to update maps on traffic jams and speed traps in real-time. The supply chain industry has recently seen the same innovations, using mobile apps to centralize and collate production data from various sources. 

So what’s the problem? Most companies are still using paper maps to navigate their supply chains. 

What is the incentive for brands and retailers to collaborate?

The time to begin the journey of pre-competitive collaboration is now.

Pre-competitive collaboration offers power, efficiency, and improved decision-making for brands and retailers. Everyone in the industry can gain better visibility and avoid costly mistakes without the fear of losing market advantage. 

When brands and retailers choose to start collaborating with the rest of the industry, the benefits are substantial:

  • Efficiency: Brands and retailers can leverage the collective intelligence of their peers to make smarter decisions faster.

  • Risk mitigation: Industry-wide data sharing clarifies which factories are high-risk and low-risk, allowing everyone to avoid major issues proactively.

  • Acceleration: Everything moves more quickly when all parties are on the same page and know what is expected.

The state of collaboration in the supply chain

Although the industry’s lips are buzzing with the need for sustainability and traceability, “nobody knows what to do,” says Fernando. However, achieving these challenges can be solved much more effectively when more within the industry share their data. 

An illustrative example lies in the growth of product and supply chain regulation. “In the early phases of the supply chain, we deal with B2B, and in the later phases, we deal with B2C. But nobody is talking about B2G: business to government. We are a regulated industry now. If we ignore B2G and treat the government as an internal client, we will have problems. We need to innovate.” 

Pooling relevant data will not only help the industry stay ahead of ever-growing regulation and compliance requirements but will also improve everything from bottom lines to customer reviews. As Fernando describes, such a quantum leap happens when we “move from inventions (tools, apps, and software) to innovation, and the innovation happens when (companies) adopt the platform.” 

How is Inspectorio supporting supply chain collaboration?

Different companies have different pain points, but one nearly universal issue across the industry is using multiple technologies, databases, and communication channels to manage supply chain operations. 

“We need one source of truth,” Fernando explains. “It’s not sustainable to log in to seven different tools, with Excel, PDFs, emails, and everything else. We need to consolidate everything in one place.” This is a unifying theme among Inspectorio’s suite of end-to-end supply chain management platforms for Quality, Compliance, Tracking, and Document Management.

Advice for the supply chain industry

When asked what advice he has for the industry, Fernando stresses, “This is an endurance race. It is not even a marathon; it’s Iron Man.” 

He means that your organization will have to do it all: swimming (quality), biking (compliance), and then finish with a marathon (sustainability and traceability). Strength in one area isn’t enough to get to the finish line; you must prepare for all stages of the journey. 

Because this race is inevitable, you have to start training now. It doesn’t matter where you’re starting from — the sooner your company starts preparing itself for the transformation, the better. 

Click here to watch the entire interview between Fernando Moncayo Castillo and Lauren Parker.


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