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Part - IV

How much to Share?

The alignment of business objectives defines the nature of any collaboration. For the collaboration to be successful, both organizations must share strategic objectives and the values associated with risk and reward. There must be agreement about how progress and success will be measured against the collaboration's objectives. Only after reaching an agreed-upon set of objectives and a way of measuring them can information, often proprietary in nature, be shared.

Information sharing is fundamental to achieving the business objectives of supply chain relationships. But how much information, and what kind, should be shared? Even transactional relationships, the most casual and easily replaced in the framework, demand some level of information sharing, even if it's only about purchase orders and product specifications.

In deeper, operational relationships, it may be useful and appropriate to share planning and forecasting data. Integrated collaborative relationships typically involve even more information sharing-about capacity, production schedules, marketing plans, costs and actual on-hand inventory, for example. This degree of sharing will deepen the collaboration and can build such a high degree of trust that competitors will find it very difficult to threaten the relationship by cutting in.

Information exchange must take place across an infrastructure. This may require investments in new electronic communications technology, such as the meta-data system language XML, EDI (Electronic Data Interchange) and supply chain software. Fortunately, industry standards are emerging through consortiums, such as Rosetta-Net for high-tech, that will accelerate the speed of this information exchange.

Process integration can take a number of forms, depending on the objectives of the relationship. The degree of integration should be clearly defined so that everyone involved in the collaboration knows which are joint processes and which are separate. It must be clear where the links begin and end.

A collaboration always presents an organizational challenge. There is not a single governance model that will do justice to the myriad effective combinations. Nonetheless, decisions have to be made and responsibility must be assigned.

Consider these examples of successful supply chain collaboration.

One of the better-known examples can be found at Toyota. The auto-maker wanted to achieve best-in-class quality while also reducing costs. To that end it built competitive supply chain relationships both with and among its suppliers. Detailed competitive information was shared with parts suppliers about customer orders and forecasts, lead times, capacity utilization and inventory levels, design specifications, delivery performance, component and product costs, and ideas for improving operations.

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* Timothy Mould is a Boston-based senior manager in the Accenture Strategic Services practice. His work focuses on developing and implementing integrated value-chain strategies through eCommerce capabilities.
Edwin Starr, a partner in the Accenture Supply Chain Strategy practice, leads the firm's eProcurement and Strategic Sourcing practice. He is based in Chicago.