Why Does Supplier Collaboration Often Go Wrong?

While everyone knows that collaboration is a good idea in theory, the reality for many companies that try to work closely with suppliers is much different. That’s why a recent study in the Supply Chain Management journal looked into the reasons that supply chain collaboration often fails.

According to the study’s authors, many firms are set up to fail from the beginning because they have a “wall of resistance” that will prevent them from collaborating successfully.

First of all, there are “internal resistors” in many cases, and these create an environment that is not conducive to collaboration. Whether it’s the culture of conservatism that resists change that can be found in many big businesses or a sort of structural inertia, the setup isn’t quite right. There can also be a social aspect wherein some people feel like their territory is being infringed upon somehow.

Moreover, resistance can come from the collaboration process itself.
Sometimes, companies just aren’t prepared to successfully manage the new relationships, and bringing processes from two very different organizations together can simply be too difficult.

Imbalance of Power

Relationship intensity was also identified as stumbling block. When the partners involved have an imbalance of power, one side might behave in a more opportunistic manner. Often, organizations cannot segment their supplier base in the right away and enforce everyone to comply, whether it’s because they don’t know who to determine which suppliers to collaborate with or they lack the proper oversight.

This is why it is often not the idea of collaboration that is the problem. Instead, it’s the firm’s failure to do the right groundwork or develop the ability to sustain such relationships.

To form a productive collaborative partnership, companies need to be ready to manage internal change and external change with the supplier at the same time. By overcoming the resistance inside their own organization, businesses can find success in these supplier projects.

This blog post was based off of an article from Forbes. View the original here.

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