What is supplier collaboration?
Supplier collaboration is a strategic approach to supplier relationships in which a business actively works with its suppliers to achieve shared goals. Supplier collaboration requires relationship-building between organizations and the practical solutions to facilitate collaboration.
Supplier relationships are business-critical, and investing time and effort into building positive relationships with suppliers is a smart move for any business. However, supplier collaboration goes beyond just having good relationships with your suppliers. It also includes the solutions/infrastructure/tools that support how a business works with its suppliers to achieve shared goals.
Procurement teams engage in external collaborations with vendors and suppliers to to source, purchase, and pay for the raw materials, goods, and services that keep an organization running. Though these interactions are largely thought of as transactional, in reality these external collaborations are most effective when they are ongoing and strategic, involving shared information, resources, and capabilities to address challenges and achieve mutual benefits.
Better supplier collaboration addresses procurement challenges in areas such as technology and digitization, cost and financial management, risk management and compliance, and talent and workforce and can result in mutual benefits like cost reduction, quality improvement, innovation, and access to new markets.
Common supplier collaborations occur during the purchasing process, including work like vendor selection (RFx), contract negotiation, vendor onboarding, and vendor risk assessment. But supplier collaborations don’t start and end with procurement teams—they involve many departments throughout the organization, and include internal stakeholders from a variety of functional areas such as IT, Operations, Finance, Supply Chain Management, Legal & Compliance, Security, Quality Assurance, HR, and more.
Deloitte, McKinsey, and others have identified supplier collaboration as a top area where procurement can add value. One challenge is that most organizations have invested in enterprise applications—S2P, CLM, etc—that streamline internal workflows and processes but do not provide robust support for external collaborations.
As a result, there is limited coverage for the portions of supplier collaboration that take place between the parties. Procurement teams rely on phone, fax, email, and online video conferencing platforms, all of which lack the structure, security, and transparency required for effective supplier collaborations.
External collaboration tools like TakeTurns are designed specifically for working with people outside your organization. They provide excellent support for supplier collaboration, providing one place where both the procuring organization and vendor organization collaborate (exchange, request, manage, version, and discuss) on documents and files necessary for procurement processes. Keeping all the documents, files, and communications in one place allows TakeTurns to provide an auditable trail of all interactions and transactions, ensuring that all stakeholders are on the same page, reducing errors and miscommunications. This transparency supports trust building in long term supplier relationships and the practical ways businesses work together.
Supplier collaboration is a strategic imperative for businesses seeking to optimize their supply chains, drive innovation, and enhance overall performance. By fostering strong relationships and implementing effective collaboration practices, organizations can reap significant benefits such as cost reduction, improved quality, and accelerated time-to-market. Dedicated tools and platforms designed for external partnerships can help businesses realize the full potential of their supplier collaborations.
Traditional methods of communication and collaboration often fall short in meeting the complex demands of modern supply chains. External collaboration tools like TakeTurns offer a new solution, providing one shared place for collaborating on documents and files, and communications around the shared content. By streamlining processes and enhancing transparency, these platforms empower organizations to build trust and achieve mutual success with their suppliers.
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