Three Levels of Supply Chain Collaboration

It’s important to get the most you can out of a supply chain. To be sure you do, supply chain collaboration is essential. To be effective, it means all parties are sharing relevant information in real-time. At first, it can seem complicated, but when you break it down into the three levels, it makes a lot more sense.

Level 1: Integration of Transactions

The first level involves computerizing all of the business transactions and activities. There are many software tools online to make this integration function as it should. At this level of supply chain collaboration, participating members can exchange data like:

  • Purchase, sales and work orders
  • POS details
  • Debit and credit notes
  • Invoices
  • Payments (incoming and outgoing)

Level 2: Information Sharing

At this level, all the members will share information using electronic data interchange, software tools or the Internet. You’ll share more specific information like:

  • Plans for production and transportation
  • Forecasting production
  • Bills of materials
  • Orders & product details
  • Inventory
  • Promotions & prices
  • Available products
  • Terms of contracts
  • Allocations

Level 3: Strategic Collaborating

The final stage of supply chain collaboration involves strategizing about the planning and redesigning processes. This will include sharing risks and rewards. Together, you’ll make decisions pertaining to items like:

  • Improving your forecasting accuracy
  • Improving relationships along the supply chain
  • Increasing profits
  • Resolving critical events
  • Improving sales and processes
  • Managing procurements
  • Determining pricing plans

If you don’t think you have reached a high enough level of collaboration or you’d like to improve your supply chain and distribution, visit the Demand Solutions website where you’ll find an expert team to help you find improvement strategies, grow your business, reduce costs and increase your margins.

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