Their premise: As markets become tighter, energy and raw materials prices increase, and as working capital becomes harder to procure, supply chain collaboration will suffer in a Darwinian struggle for profitability scraps. Yet two reassuring developments are undermining that premise.
First, most supply chains are finding enormous amounts of waste, which they are c trimming away to keep working margins. Second, supply chain partners are finding innovative ways to make collaboration work for mutual benefit in previously unexplored ways. As a result, while a number of supply chain partnerships have deteriorated over the past eight business quarters or so, most have survived. In fact, many companies credit their own survival largely to their working relationships with buyers and suppliers.
Why is this the case? Because successful supply chain relationships mean much more than cost efficiencies and economic conveniences. As we discuss below, they bring with them other important advantages that are not always apparent to the folks in the organization with the “sharp pencils.”