The road to supply chain excellence is paved with challenges, but just as much with opportunities to stay ahead of change. In this blog, we zoom in on one of those opportunities: how can you build a resilient supply chain ecosystem in order to leapfrog your competitors?
If resilience and flexibility are the key to a futureproof supply chain, then working on a supply chain island is definitely not the way to go. That’s why more and more supply chain leaders build ecosystem partnerships. Sure, the concept is not new. Many big companies have long-standing trade agreements with suppliers. This traditional buyer-seller relationship, however, is increasingly evolving into collaborative partnerships that leverage the capabilities of all the members to provide added value to everyone involved.
+50% of large organizations will compete as collaborative digital ecosystems rather than discrete firms - sharing inputs, assets and innovations, by 2026 (Gartner)
Why create or join an ecosystem?
Ecosystem partnerships come in many different flavors: from the traditional business-driven ecosystems with buyers and sellers, ecosystems in which one large, incumbent player orchestrates the collaboration and ecosystems with multiple interdependencies through to partnerships between competitors even.
All types can quickly generate benefits. Organizations might share data on market trends, customer demand, logistics, etc., in order to improve efficiency, boost supply chain transparency and resilience or mitigate risks. They can join forces to optimize transport planning, cut logistics costs or reduce waste. Or partners can collaborate to expand their offering with new services or products, build new business models or target new markets.
Business case: Large Airport Operator
Ordina is currently building a data platform to support collaboration between a large airport operator and its many different partners.
Gert Maton, people program manager, explains: “The large airport operator exchanges data with many different parties in the airport ecosystem: from the Panos bakery chain, luggage brand Samsonite and the Belgian railways to taxi companies, etc. For example, they collect data about the amount of luggage and passengers they handle and share that information with partners, at a certain cost. Based on those insights, Panos knows how much bread to bake and the taxi company knows how many taxis should be available, etc. This is just one example of how an ecosystem can create a win-win for all parties involved.”
Why don’t we trust each other?
In spite of all the above benefits, supply chain collaboration often fails, as building an ecosystem invariably comes with complexity, explains Jan Simons, Head of Industry at Sopra Steria. “There are more stakeholders and thus more responsibilities, more different systems to integrate and much more data to manage.”
That data management may well be one of the trickiest parts. Working well together requires open information sharing between all the supply chain participants. To make sure that goes well, all partners must make agreements on data quality, privacy, usage and sharing. However, setting up joint standards and exchanging data requires a great deal of trust between the partners. “And trust is difficult to build,” Jan continues. “Many organizations are reluctant to share data because they consider it too sensitive or simply don’t want competitors or even partners to know too much details.”
It’s all about people
Like already mentioned in our blog on ISC planning, modern, digital supply chains require new skills from supply chain professionals, as well as a change in mindset. A collaborative and trusting mindset is one of those new requirements. “Trust is a must for ecosystem partners to work together successfully, yet building trust takes time”, says Jan. “That’s why we often advise our customers to start small in scope, but with a long-term ambition, with simple partnerships that deliver results quickly. In this way, the willingness to share information will grow.”
“Demonstrating added value is indeed key,” Thijs Bender, account manager industry adds. “If everyone understands that the partnership is a win-win for both parties, they’ll be more likely to collaborate and share data. By the way, transparency and openness are key to achieving this. If you are open about sensitive data like cost, clearly indicate the value you expect to get from the partnership, and even share disappointments or failures, greater trust will follow.”
“If everyone understands that the partnership is a win-win, they’ll be more likely to collaborate and share data.”
Thijs Bender, Account Manager Industry
Can legislation help incorporate trust into the fabric of an ecosystem?
What about a little help from legislation to foster partnerships and instill that much-needed trust? Thijs believes that the authorities can help, he says. He refers to the Dutch Digital Infrastructure Logistics (DIL) programme where public and private parties join forces to make logistics companies digital-ready. “That’s a fine example of how the authorities can support companies to take the leap.”
“In this case, the government is an enabler for partnerships, as it instills trust,” says Eelco Stofbergen, business director cybersecurity. “Yet regulations can also force companies to team up, like the European regulation that obliges P2P platforms to have a certificate to operate legally.” He highlights that if there’s a clear win-win, like Thijs mentioned earlier, government interference is not needed – or maybe even not wanted: “Dutch banks are, for example, happy to participate in Transaction Monitoring Netherlands because the added value is crystal-clear: they all want to protect the integrity of the Dutch financial system.”
Keep data (cyber)secure
No matter how clear the benefits, how big the trust or how close the ecosystem partners are to each other, collaboration and data sharing always involve risks. That brings Eelco to the topic of cybersecurity and privacy: “The more connected partners are, the greater the risk that an incident at one party will harm the other. So, whenever organizations are communicating their data between different platforms, that needs to be completely cybersecure. When they get data security and privacy right and conduct good risk management, they can be sure that things will never really get out of hand.”
“When you get data security and privacy right and conduct good risk management, you can be sure that things will never really get out of hand.”
Eelco Stofbergen, business director cybersecurity
Ecosystems: how we can help
A 2020 McKinsey research shows that companies that regularly collaborate with suppliers demonstrate higher growth, lower operating costs and greater profitability than their industry peers. The message is clear: organizations that want to futureproof their supply chains, must team up.
Unsure where to start? Trust Ordina to put your collaboration efforts on the right track:
Inspire to desire: Together, we identify viable, compelling business cases and define what you want to achieve, what role you want to play and what you need to realize your goals.
Technology you can trust: Our experts build the required infrastructure to support the ecosystem – from integrating systems, building a data platform and layers of defense (cybersecurity and privacy) through to setting up a governance model.
Engage your people: When there’s a need to upskill your team or change the mindset, our change management team has got you covered!