Collaboration First, Competition Second: A new kind of Business

Globalization of production methods, and the growing consumer concerns for supply chain sustainability have collided to create an incredibly complex dichotomy in globally functioning organizations.

There is a growing need and concern for developing closer collaborations with suppliers, and competitors alike.

Building supply chain transparency is an effort that requires incredible compliance from multiple moving parties. Producers and retailers are positioned in an inflection point where collaboration to improve supply chain sustainability holds potential for incredible value-added for all parties in a supply chain’s organization (Danigelis 2018).

With collaboration comes challenges, and breaking down the silos of traditional business relationships is one of the main barriers to successful collaboration. One could, in fact, argue that the biggest barrier to supply chain transparency is the lack of collaboration and compliance with suppliers. Another of the largest barriers for pushing forward sustainable supply chain agendas is the lack of engagement between competitors to create shared value.

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Let's dive into an example:

Your organization discovers new sustainable practices in the manufacturing process of a supplier that could build a massive competitive advantage for your organization. These business practices could impact society at large in the reservation of natural resources, such as clean water and air.

Your collaboration with your supplier has finally paid off, and it’s created opportunities for supplier-enabled innovation. This innovation will prove very profitable for your company.

What do you do?

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Sharing of value with competitors and suppliers is a necessary action to create impact to supply chain sustainability at large, even if this means devaluing of an initial competitive edge of your own company. Profitability is a direct sign of top-line value, but what is profitability if it’s not grown in a sustainable manner?

“Our success depends not only on the work within our own value chain, but on disruptive partnerships across a broader textile production and manufacturing ecosystem,” said Cyrus Wadia, VP Sustainable Business and Innovation, Nike.

An ecosystem conducive to sustainability requires a mindset of change, not competition.

Some of the key advantages of building ecosystems for supply chain sustainability are:

• “Collaboration reduces the barrier to sustainable production for retailers
• Working together frees up resources to focus on innovation that could provide a competitive edge, such as tracking material sourcing for products
• Reinforcing the credentials and business value of a pool of high quality suppliers allows retailers to deliver sustainability improvements year after year” (Danigelis 2018)

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