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Supply Chain 101: Top Tips for Great Partnerships

Confronted with shrinking profit margins, capacity concerns and rising customer expectations, today’s logistics organizations are looking for innovative ways to provide better service at a lower cost and to ultimately increase profitability and competitive advantage. This is why supply chain success extends beyond your workforce and into your partner ecosystem.

Many logistics organizations understand how supply chain partnerships can help maximize service and value, but many say they’re not sure how to forge and maintain the right ones.

It does take some finesse, especially at first, but once you establish a systematic way to measure performance and remain properly aligned, partnerships have unlimited potential for your business. Here are a few tips on maximizing the value of your partnerships.

Start at Home

A question I hear quite frequently around the industry is “Which partnerships make good busi­ness sense?” To answer this question, my first rule of thumb is to take a step back and look at where your organization stands now.

Partners are there to complement your business and help you improve upon any shortcomings. As I mentioned in my last post , you can’t improve what you don’t track and measure. Measuring your organization’s performance across key metrics enables you to more accurately determine your strengths and weaknesses, which processes you’re able to carry out efficiently and cost-effectively and which activities might be better executed by a supply chain partner. This way, you can connect with partners who have the necessary expertise to plug any holes in your operations. While your partner does their job, you can remain focused on delivering sustainable value and quality for the customer, as well as optimizing efficiency and reducing costs.

Collaborate

Forming the right partnerships, however, is just the beginning. Over the long haul, collaboration and trust are essential to ensuring that a partnership remains mutually beneficial. Partners are well served by sharing information about their short-term and long-term plans and how they are performing against established goals.

In fact, open communication between your organization and your partners affects all facets of the business, from customer service to shipping and fulfillment and everything in between. For example, regular, honest discussions make you aware of unforeseen inefficiencies and allow you to quickly make adjustments to processes like shipping that can help you avoid costly delays.  

This kind of communication and transparency enables part­ners to work together more effectively and quickly resolve problems before they impact customer service and ultimately, profits. By taking a collaborative approach to performance improvement, logistics orga­nizations and their supply chain partners can refine processes and increase cost efficiencies to deliver the high-quality, high-value customer service that creates a competitive advantage.

Show me the Money

Just as bonuses and other rewards can help increase workforce engagement and productivity, incentives can also be an effective tool for improving partner performance. A well-defined process — communicated clearly and implemented consistently —is key to any successful incentive program. By establishing clear, attainable metrics, tracking and measuring progress and rewarding achievement of defined goals, you can incentivize partners to be more engaged, collaborative and efficient.

At the end of the day, we rely on our partners to enhance our supply chain process. Establishing key metrics of your business strategy and knowing where you need to improve helps you determine who the right partners are for you. Openly coordinating goals and measurements with partners and actively engaging them will ultimately drive best-in-class customer experiences and improve a company’s bottom line.

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