Mike Jette, vice president of consulting with GEP, defines the term “Collaboration 2.0,” and explains how it differs from earlier concepts of supply chain collaboration.

“Collaboration 1.0” arose from a desire by manufacturers, retailers and distributors to partner with key suppliers in search of process improvements across the supply chain. Automakers were among the pioneers of the concept, seeking closer ties with producers of subassemblies and critical parts. “It all started with the premise that we can work together to find ways to take waste out of the combined supply chain,” Jette says.

Unfortunately, the theory didn’t necessarily work in practice, as power imbalances in supplier-buyer relationships often resulted in one side dictating terms to the other in the name of “collaboration.” In addition, both parties were reluctant to share what they considered to be proprietary information.

Along comes “Collaboration 2.0,” and that attitude has shifted. A key driver of the change, Jette says, is the arrival of the pandemic and resulting disruptions in global supply chains. “One silver lining from the pandemic was that so much chaos caused everyone to throw out the old rulebook and figure out how to solve problems again,” he says. Now, the notion of collaboration arises more from a desire to realize mutual benefit from the practice.

The challenge now, says Jette, is to take the lessons learned in 2020 and find a way to scale collaborative relationships and promote joint problem-solving. In the process, many manufacturers “are loosening of lot of contractual constraints and service-level agreements, with a focus on solving bigger-picture goals.”

In the end, it’s all about promoting stronger supply chain resilience. Jette defines the word as “visibility plus agility,” two qualities that are equally important in mitigating the impact of any number of future crises.