Raising supplier collaboration to a new level through strategic cooperation

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Although not all companies can use formal segmentation methods to classify their suppliers, they generally know who their strategic suppliers are; similarly, suppliers also understand their strategic importance to their customers. The most effective approach in supplier collaboration is to achieve strategic cooperation, which enables the two companies to maintain consistency in new product development, market promotion, resource sharing, and quality improvement, thereby enhancing the efficiency and value of their collaboration. The first step for an organization is to determine what it wants to achieve through its collaborative efforts, and what it needs to do to reach those goals. Internal coordination and commitment among senior management are also crucial to ensuring that appropriate resources are obtained. For example, in order to develop more sustainable detergents, Unilever has partnered with Novozyme, the main supplier of enzymes, to jointly create new enzyme solutions. This partnership leverages the strengths of all parties – it combines Unilever’s understanding of what types of stains and material properties exist, as well as Novozyme’s knowledge regarding what is most important for optimizing the performance of reagents. This collaboration led to two enzyme innovations, improved product performance and market penetration, and enabled the company to target competitors in the premium brand segment. Furthermore, the new formula performs well at lower temperatures, helping customers save energy and reduce carbon dioxide emissions. Other organizations involved in the SCI (Supplier Collaboration Index) have also adopted formal methods to foster greater strategic collaboration: – By introducing Unilever’s business planning methodology. – The buyer and supplier agree on their short-term and long-term business goals, set common objectives, and jointly develop plans to achieve those goals. – Areas with potential for cooperation also include shared growth, technological innovation, quality management, etc