This case study illustrates the value generated by collaborative supply chain operations. It demonstrates the value that can be had when two different companies in the same industry combine their supply chain operations. If these companies are selling to many of the same customers, and if both of them compete against much larger companies then they can mutually benefit from creating a single supply chain to support both of their businesses – even if they still compete against each other to some degree.
The digital age is right here; everything is revolutionized. Not only has it changed and/or reshaped how the entire enterprise communities communicate and conduct businesses but specifically how the supply chains are operated and managed.
Thomas Friedman, superviser, Crunchy Candy Company
When you read this case study you will see the supply chains of Just Born Candy and Crunchy Candy Company. You will see the location of their factories and their distribution centers. Also shown are customers’ stores where they make deliveries. Each company does not sell to all of the same customers as the other, but there is a significant amount of overlap in the customers of the two companies. You can see the overlap in the supply chains of these two companies when you map them out as shown in the screenshot above. At the start of the case study both companies operate their own supply chains.
Customers would like to see fewer deliveries of candies in larger quantities like what they get from the bigger candy companies (M&M Mars and Hershey’s). They are also asking for lower prices. Both of these customer requests point toward combining supply chains. That way both smaller candy companies can make fewer and larger deliveries of their combined products. And if they can reduce their supply chain costs, they can also lower prices to their customers. In this case study each company makes and delivers two kinds of candy to customers. These products are shown as JBCandy1, JBCandy2, Crunchy1 and Crunchy2 . There is a spreadsheet reporting template you can use to analyze downloaded simulation data. Import your simulation data into the template and create monthly profit & loss reports as well as generate key performance indicators.
In my experience, successful Supply Chain Collaborations that involve two or three separate initiatives in a category boost margins by 5% in the affected category, through a combination of increased sales and reduced costs. It should be clear by now that successful supply chain collaboration is neither quick nor simple. But is it worthwhile? The answer has to be an emphatic “YES.”
Ultimately, blockchain can increase the efficiency and transparency of supply chains and positively affect everything from warehousing to delivery to payment. Blockchain provides consensus – there is no dispute in the chain regarding transactions because all entities on the chain have the same version of the ledger.
In an ideal world, every agency involved in turning raw materials into goods, selling them, and distributing them to business customers or consumers would collaborate, thus maximising supply chain cost-effectiveness and reliability. As yet though, that degree of collaboration is more likely to be the exception than the rule.
As more organisations recognise the need to collaborate, a whole new culture is evolving. This is why collaboration has become such a familiar buzzword in the supply chain world. But true collaboration is not an easy state to arrive at. Boundaries of mistrust must be broken down and conflicting objectives must somehow be transformed into aligned goals.