Supply chains and the collaboration gap are you ready?

Supply chains are found in every industry. Last century supply chains were simpler.
Most critical work was completed in-house, the letter headed paper was delivered, the
post posted. Now, keeping up with technology innovation is difficult, most product or
service providers with serious ambitions realise that to compete, calling in specialist or
expert product or service providers, in this case the Fintechs, allows the provider to
concentrate on their key products and services. This lets providers focus attention on
their unique selling points. The trick for the experts in their field is to identify new
solutions to old problems and the new ways of doing things entirely and make sure that
providers know about what they do.

This article focuses on what happens after the suppliers are in place with their client, or
post completion collaboration in supply chain management.

What is supply chain collaboration?
Supply chain collaboration is about coordinating an organisations departments and
divisions and external partners to sustain an optimised flow through the supply chain to
efficiently meet demand and ensure on-time, in-full delivery. Supply chain collaboration is when two or more independent firms working jointly to plan and execute supply chain operations. It can deliver substantial benefits and advantages to collaborators. It means establishing actual current information and processes sharing with supply chain partners to facilitate identification and resolution of issues.
Supply chain collaboration in financial services is different to manufacturing. In financial services it can encompass the full scope of the operational model and supply chain functions. These range from regulatory hosting, design, product features and functional and operational deliverables through to forecasting, capacity planning and quality management.

In financial services, the supply chain is documented in the operational model. The operational model will deal with different operational matters depending on the organisation of the provider, or the relevant division, from the provision of banking services, investment services, or advice services. The operational model deals with the flow of information supporting both the instruction and the movement of cash money and capital, the decision making behind advice and the products and services that give
access to financial services. The financial services supply chain is a multifaceted network. It involves a wide range of stakeholders, each playing a unique role. Collaboration is essential to bridge the gaps in the front, middle and back operational environments with an organisation and then with its suppliers. With the complexity brought on by rapidly expanding supply chain networks, and the debate about on and offshoring, it has become absolutely essential to the proper performance of supply chains that everyone is committed to frictionless supply chain collaboration and making it easy for all to work closely in a collaborative setting creating a seamless flow of goods, services and information to build a robust effective supply chain.

Levels of Collaboration
Effective collaboration with supply chain partners balances your organisations need for information and the risks of sharing its valuable information.  Your organisation is trying to create, through near-transparent communication, a network of collaborators to act as an extension of your efforts to get the right product or act in the right way in a timely manner for your customer to be satisfied at the exact time they want and need it and use the product and services you have designed as intended.
Information sharing is important in the electronic service “E”-Supply Chain Management
for several reasons:
– Efficiency: Sharing information among parties in a supply chain can significantly
increase efficiency by reducing inventories and smoothing operational
performance.
– Visibility: It enhances supply chain visibility, which is essential for managing
operations, forecasting demand, and responding to market changes.
– Agility: Information sharing contributes to supply chain agility, allowing
companies to be more responsive and flexible in the face of disruptions.
– Collaboration: It fosters collaboration among supply chain partners, which is key
to meeting customer needs and reducing costs effectively.
– Competitiveness: In today’s market, competition is between entire supply chains
rather than individual companies. Effective information sharing can lead to
superior gains and competitiveness.
– Risk Management: It helps identify and manage risks within the supply chain,
including the prevention of information leakage and other security threats.

Overall, information sharing in E-Supply Chain Management is a strategic tool that can lead to improved performance, competitive advantage, and the ability to adapt to changes and challenges in the business environment. Supply chain collaboration can be categorised as:

Level 1: Transaction integration. The first level information sharing is to make available relevant information via a simple browser to the fintech partners as determined by the client and the supplier responds to Client on a needs must basis. Software services such as teams, email video conferencing are a subsection of this group and carry specific data protection and cybersecurity risks.

Level 2: Supply chain management information sharing. The next level is to exchange business information with Fintech partners in the supply network to ensure capacity. Automation of this function can lead to timely sensing and forecasting of market conditions, rapid communication of critical information among supply-chain partners, allowing for alternative strategies and implementation among supply chain partners, and expediting execution of plans through operational performance control
and information systems providing for proactive management in the supply chain such
as delivering timely products to the marketplace.

Level 3: Strategic collaboration. The final level is to create business rules that trigger automated corrective actions and/or sophisticated human intervention triggers. For instance, Fintech Supplier’s operational performance forecast is automatically updated based on Client forecasts, including others in the supply chain. The desired outcome of this level of supply chain coordination is the synchronisation of activities among the supply chain members so that each member acts in ways that are appropriately timed with respect to the others. You and your partners work together in joint planning, process redesign, often as well sharing some level of risk and reward. Collaborative decisions are made on issues like:
– Improving the accuracy of forecasts
– Strengthening strategic supply chain relationships and profitability
– Enhancing sales and operations planning, customer experience
– Accelerating and managing demand plans, and fulfilment throughout the supply
chain
– Resolving critical supply chain events
– operational performance and operational capacities
– operational performance facility and fulfilment network expansion
– Pricing plans 
Supply chain collaboration involves internal departments and external partners creating and delivering an optimised flow through the supply chain to efficiently meet demand and ensure on-time, in-full delivery with live data and management information shared between them and processes with supply chain partners to facilitate identification and resolution of issues. In summary the goal of a seamless supply chain collaboration is:

– An essential component to effective supply chain management, a necessary piece in business resilience; about different entities working together toward shared objectives
and about improving agility enabling organisations to design their supply chains more effectively

Resilience of Supply Chain Collaboration

Transparency and collaboration can be difficult to execute, but well worth the effort when you consider the potential reduction in risk and costs, and improvement in customer satisfaction and loyalty. The complexity and interconnected nature of today’s supply chains makes them more prone to severe impacts from disruptions, whether from minor incidents like shipping or weather delays to more serious interruptions like those from a pandemic, cyberattacks or natural disasters. Security and cybersecurity are an important concern and event management can be managed through the collaborative information sharing systems. 19 July 2024 saw many firms impacted by Microsoft security update through
Crowdstrike. Supply chains should be able to handle disruptive events without breaking, that is easier
with better at collaboration. Issue resolution should happen in the most efficient way. Supply chain teams should share information and collaborate at the right time. They need the right tools and workflows in place to make that collaboration seamless across all parts of the supply chain.

Why is supply chain collaboration important?
With the amount of data, transactions and electronic information flowing through today’s supply chains between Fintech suppliers and organisations, it is easy to think that there must be tightly integrated systems to produce the results they do. However, that is not always the case. Supply chains remain fragmented, different departments and partners operate on different systems, KPIs and so different versions of the truth. Data from one department or Fintech supplier often isn’t necessarily shared with
another. So, if one information system does not talk to the others inefficiencies arise
that cost organisations time and money.

How collaboration with Fintechs benefits your supply chain
Organisations use Fintech suppliers to integrate different functions and connect
systems and bring in new functionality. Exception management should not happen on an ad hoc basis. Modern supply chain collaboration software gives users the tools to coordinate responses to manage
exceptions in a more dynamic and interconnected fashion. Successful supply chain collaboration involves bi-directional communication and decision-making. Supply chain collaboration is a critical feature for organisations to manage risk and resolve disruptions efficiently. Supply chain collaboration tools and software help partners respond with agility to changing conditions, create more accurate forecasts, develop and share capacity plans and monitor and manage quality concerns.

The people involved and their mindset, culture and processes around collaboration
need to be focused on success to enable supply chain teams to take full advantage of
the latest technology. Supply chain collaboration involves, in part, letting suppliers and partners make the right decisions to help the organisation (Level 3 Collaboration). Rather than taking a top-down approach to collaboration and dictating terms to suppliers, organisations should ensure that information and input is flowing both ways through their supply chains. Collaboration offers many benefits for business. To increase the chances of success, partner companies should take these six actions together.
– Real-time data sharing: Effective collaboration involves all parties having access to the most up-to-date data. By connecting disparate data sources, supply chains can ensure they have the best foundation for making decisions around planning, execution and exception management.
– End-to-end visibility: Visibility of the entire supply chain is crucial to understand what’s happening at any given time. Understanding the issues arising whether at the organisation or Fintech suppliers, and any potential mismatches in capacity or forecasting. Visibility of effective management information into the supply chain facilitates an organisation’s ability to identify potential issues and respond
before they get out of control.
– Configurable workflows: Every organisation is different as are its supply chains. This means the software used to run that organisation needs to be adaptable to align with specific processes and workflows.
– Advanced AI: Artificial Intelligence built into supply chain collaboration software is becoming more normalised. Next-gen AI allows for faster identification of issues and threats and can provide recommendations on what to do about it, empowering users to make better, faster decisions in coordination with supply chain partners.
– In-Context Messaging– This gives users with the right information at their fingertips. In-context messaging promotes collaboration by enabling users to communicate seamlessly in real time, without having to switch between systems.

Why collaboration is hard?
Companies often lack the commitment from senior management to drive thecollaborations. This means the message that the collaboration is important may be lost” as it passes down through the organisation. This means managers and front-line teams don’t show the same enthusiasm and commitment as their leadership does. Sometimes organisations fail to have sufficient resources (or too thinly spread) to make
collaborations work.

These issues are difficult to overcome in themselves. They are compounded by the fact that collaboration initiatives must align two separate organisations. To have the collaborations work, the players involved must navigate differences in organisational design and culture. The reward of the different parties involved in the supply chain collaboration may be fundamentally misaligned. This making it difficult even for enthusiastic, committed staff to make the collaboration work while still fulfilling their other targets. These misaligned rewards mean different players in the supply chain see their world in very different ways.

This difference in outlook can mean organisations and fintech suppliers want very different things from the collaboration. The power dynamics between collaborating partners can be dramatic. Making the right choices. Organisations greatly improve their prospects for success by taking a thoughtful decisions in the areas they select for collaboration. Their choice of partners, and the way they implement for their collaborations. Based on our experience. Here are six ideas that can make the difference between a productive collaboration and a frustrating one.

1. Collaborate in areas where you have a solid footing.
   Organisations should think carefully if the collaboration is simply to fill gaps in their own
   capabilities. Successful collaborations build on strengths rather than compensate for
   weakness. An outsourcer looking to collaborate, will have little to gain from access to a
   Fintechs suppliers’ resources unless it has the in-house analytical capability to make
   use of suppliers’ data or capacity to benefit from increased opportunity.
   Potential collaborators should also be sure they have the right supporting infrastructure
   in place in advance of any collaborative effort identifying with their partner senior
   management commitment to the collaboration process over the long term. Is the
   partners inhouse information technology (IT) systems robust enough to facilitate real-
   time data sharing if required?
2. Turn win-lose situations into win-win opportunities with the right benefit-
   sharing model.
   Some collaborations promise equal benefits, others mean benefit could fall more to one
   partner than to the other. Aligning contracts to economic interest tends to lead to a
   better relationship.
3. Select partners based on capability, strategic goals, and value potential.
   The biggest brand might not be the best one. Many companies aim to collaborate with
   known brands rather than nimble Fintechs because they assume that the greatest value
   is to be found there. This often turns out not to be true. A focused Fintech supplier may

find higher value collaborating with you, and so invest more time and effort in the programme than a very large one that is already juggling dozens of similar initiatives.

Selecting a partner may be better based on these points:
– First: is there enough potential value in collaborating with this Fintech supplier to merit
the effort? Both partners need to be sure it will deliver a sufficient return on investment
to justify the upfront investment.
– Second: do partners have enough common ground and strategic interests to support
the collaboration?
– Third, does the Fintech Supplier have the right infrastructure and processes in place to
provide a basis for the collaboration? If yes is likely to be less frustrating if one partner’s
existing planning processes, systems, or performance are adequate.

4. Invest in the right infrastructure and people.
   Companies frequently underestimate the resources needed to make collaborations
   work. There is an assumption that staff in various functions can do what’s required in
   addition to their other responsibilities.
   Relatively simple collaborative tasks will be more difficult than equivalent activities
   conducted wholly in house. Colleagues must overcome differences in culture, their
   organisation and jargon.
   Disconnects within one organisation can create problems, too, all colleagues involved
   on both sides of the supply chain need to be committed to the supply arrangement.
   To prevent these problems, devoting extra resources particularly in the early stages of a
   new relationship helps.
   Successful collaboration begins with a steering committee of senior leaders who can set
   the defining vision for the collaborative effort and allocate resources to support it. The
   detailed design affected through a team comprising members of all relevant functions
   from both sides of the collaboration. This may mean for example, members from sales,
   finance, and supply chain for the manufacturer, and from purchasing, merchandising,
   and operations of the provider engaging the Fintech Supplier. This team will also be
   responsible for the day-to-day monitoring of the effort once it is in live.
   Execution of the collaboration should take place within the line organisation and will
   ultimately form part of the everyday responsibility of the staff assigned to it. with strong
   support when establishing each new collaboration learning from previous collaborations
   during the initial phase of subsequent efforts.
5. Establish a joint performance-management system. Effective performance-management system helps an organisation see that any long-term project is on track and delivering the results it should. Finding the right metrics can be challenging. Keep things simple. Pick the smallest possible number of metrics required to give meaning to the collaboration’s success and progress, and then to manage that data closely, with regular joint reviews and problem- solving sessions to address trade-offs. Real benefit comes from frequent, robust dialogue between partners, yet this is also the element most commonly ignored or underemphasised by collaborating companies.

6. Collaborate for the long term.
   It may take time and effort to see a return on the initial implementation investment and
   make a new collaboration work.
   Long-term planning means both everyone can understand each other’s longer-term
   objectives. It aids identifying initiatives they can work on together over time. This
   planning approach helps organisations break out of the short-term project mentality that
   can limit the beneficial impact of collaboration.
   When businesses take a long-term perspective, their collaborative efforts can become a
   virtuous circle: a greater understanding of each other’s capabilities, knowledge, and
   costs will often reveal new potential sources of value, while the experience of working
   closely together means that later initiatives will take less time and be easier to execute
   than early ones.