Why The Collaborative Marketplace

The collaborative marketplace is the next progression, or phase, in the retail market evolution and this is probably a more important step than almost any other phase in the retail market evolution.  The business environment and therefore the supporting tools and capabilities are changing and growing into a collaborative framework that can efficiently and effectively support their needs and the retail consumer market is no exception.  There is currently probably no better framework to support the evolving consumer demands than a collaborative marketplace and consumers themselves are driving these changes more that any retailer, outside of Amazon. I see this as the driving factor for some time, I won’t say years because each development in the retail evolution comes more quickly than the last.  

We have entered into a phase of development and expectations from the consumer that can be overwhelming for a retailer. This is why the collaborative marketplace is so important to the retail marketplace and why retailers and consumers are flocking to this framework.  The collaborative marketplace aligns more closely to social network practices and capabilities and consumers have embraced these practices wholeheartedly in a manner that is turning the retail market upside down. This social aspect of shopping is nothing new in the retail marketplace, however in many aspects the social capabilities in the eCommerce platform have been lacking.  This is the key reason for the evolution of the collaborative marketplace in retail.

Consumers have been searching for a social aspect to shopping and purchasing and the collaborative marketplace provides the platform and the capabilities to coordinate and integrate a social network interaction while still shopping and purchasing when and where it makes the most sense for the consumer.  This is the strength and the attraction of the collaborative marketplace, it allows consumers to put together the capabilities they desire at the time and the collaborative network provides a means for consumers to interact with and then complete the sale using specialized services and capabilities that meet their needs at that time.  Simply put, this is why the collaborative marketplace is the next logical step in the evolution of the retail marketplace.

This new phase requires visionary partners and participants to drive the capabilities and the interaction.  The most important aspect to the collaborative network is the interaction across all participants in the network.  The first step in the evolution was the omni market aspect and now these visionary retailers will take these capabilities and then incorporate the collaborative interaction that extends the social aspect to create a truly interactive and cohesive platform to engage not only with consumers but also with specialty service providers and niche retailers to create a consumer experience that continues to draw attention and return of the consumer.

This is an exciting and scary platform for retailers and unfortunately there is no other choice than to embrace.  Retailers must learn to share and collaborate in order to survive and these capabilities are all brought together into one platform in the collaborative marketplace.  I will serve retailers well to embrace these practices and create the type of collaborative platform that will support the changing consumer demands while also supporting the retailers’ needs to grow in the market and most importantly to prepare for the next phase in the retail evolution.

Collaborative Marketplace Direction

The retail collaborative marketplace is now on a trajectory to encourage and support more disruptive change in the retail market and I believe that Amazon is at the forefront of this disruption again.  This place leading the disruption is a comfort zone for Amazon and the collaborative marketplace is really the next logical step in the progression of Amazon drive to lead the market and deliver a shopping experience that supports the demands of the consumer shoppers.  This collaborative market extends the social commerce capabilities into the next level of interaction and also provides the framework to interact with other networks as necessary to support the shopping experience. This connectivity is especially exciting for the types of opportunities from the supply chain collaborative network that can support and drive further change in the market.  

The fascinating thing about the impact of Amazon on the market is their focus on changing the shopping experience almost at any cost.  This focus on change provides suggestions and creates the market through experimentation which I do not remember and not aware of other retailers in the market that are focused so single mindedly on changing the shopping experience.  The difference between Amazon and other retailers is really the confidence that Amazon shows in their capabilities and the trust in the consumer that wherever the market goes that Amazon will be able to meet and even create the new expectations. This almost single minded focus on change permeates across all Amazon practices, not only driving their commerce capabilities but also driving product development and other services, Prime being a great example of a market changing program that allowed Amazon to not only mainstream the eCommerce purchase but also tie together other Amazon capabilities and services to provide a value add, outside the box, proposition.

The direction of the collaborative marketplace, plain and simple, is to disrupt the retail marketplace through reshaping and encouraging new connections to support and develop new interaction and shopping methods.  The importance of the framework cannot be underestimated, this framework encourages connectivity across not only partners within the retail market but also partners across the supply chain and partners such a service providers that can support the purchase.  We have seen this pockets of these capabilities depending on the retailer, for instance Best Buy offers and encourages support and installations services from the Geek Squad. I can see the potential for home services and expansion of these services such as the services offered through Lowe’s and Home Depot for installation.

Imagination and confidence will fuel these changes and retailers with the confidence in their ability will be open to the consumer and retailer to imagine a new marketplace that creatively supports, and creates, consumer demands and expectations.  Frankly, this has been a key strength of Amazon, the imagination to create new services and marketplace along with the confidence that they will succeed in this new market wherever the changes take them. This has been a key strength of Amazon and a weakness in many other consumers.  I see this single factor of confidence as the key to the success and failure for many retailers. Many of the larger retailers have been hesitant to embrace change that could disrupt their culture and their current reality. We have seen though over and over that the larger retailers have been hesitant to embrace these new developments because of the impact on their existing practices.  This will be changing and reshaping the market as we move forward.

Collaborative Marketplace Experiments

I see the next phase in the retail marketplace coming as a result of and in reaction to the pressures of the retail marketplace as the time of the collaborative marketplace.  The market has gone through many cycles of capabilities and changes in consumer demands and now especially consumer capabilities have reshaped the market to meet their own demands.  I see this as a natural progression through growth and maturity of the market into a social commerce reality. This next reality in this progression of the collaborative marketplace incorporates the the existing capabilities with the collaborative network capabilities to create a new marketplace as the natural progression of the retail market growth.  The retail omni market is has provided an entranceway and a path to the incorporation of the collaborative network more closely into the retail marketplace as a means to sense and respond to the changing demands.

The retail omni market came as a progression of the retail omni channel capabilities and in hindsight I realize that these capabilities began the expansion into the next phase of the market.  I spoke at length previously of the social commerce aspect of the omni market capabilities and the need to extend the social networking capabilities to support the omni market demands. What I see now is the continue growth and maturity of this marketplace extending into the next phase to incorporate the extended collaborative network to support the changing demands and most importantly the increased experimentation in capabilities and new market opportunities.  I see this as a platform to support a continuous improvement process that will encourage and formalize the process to support the retail marketplace.

The retail market is well past the point where the individual retailer can hope to support the demands and the changes in the market on their own.  The introduction and growth of the collaborative marketplace provides the framework and the foundation to support and encourage the growth and the experimentation required to sense and respond to the increased demands of consumers and partners in the retail market.  As usual I see Amazon as a leader in this acceptance and incorporation of the collaborative marketplace. Amazon is probably best placed for this expansion because of their culture of experimentation and I see Amazon as filling a void and taking the step to the collaborative marketplace as a natural progression of their culture and their drive to improve the retail market to meet consumer demands or create consumer demands.

This collaborative market supports experimentation like no other market, in my opinion, and just as the omni channel and omni market drove changes through demands of consumers and acceptance of retailers the collaborative marketplace will also require a process and period of review and acceptance.  This again is being lead by forward leaning companies such as Amazon through the culture of experimentation. This culture of experimentation encourages Amazon and the collaborative network provides the framework and the technology to support experimentation. As usual though the retail marketplace in general is slow to recognize and react to these changes and unfortunately I see this same limiting wait and see culture as limiting may retailers’ acceptance and embrace of this collaborative marketplace until forced by market conditions.  This is really unfortunate because I believe the result will be further fallout and failure of retailers in this market.

Collaborative Marketplace

We seem to be moving into a new type of marketplace, or channel, the collaborative marketplace, that is visible in the service offerings offered and now marketed by Amazon, especially, but also eBay and Overstock are two additional retailers offering a variation of these services to both consumers and small retailers.  This collaborative marketplace provides an outlet not only for small and mid-sized retailers to compete on the same level as the large legacy retailers, it also provides an outlet for specialized offerings and customization capabilities that opens the door for additional specialized services. This offering of specialized services that may not be necessary for the average transaction but becomes invaluable in the specialized retail  offerings. This potential to open specialized offerings to the masses will become the most valuable benefit and opportunity for the collaborative marketplace.

We are seeing now a growth in the collaboration between retailers and service providers and product providers that is now changing the marketplace in new ways that are taking advantage of the collaborative network capabilities in development of a collaborative marketplace.  In hindsight you can see the growth of these capabilities over the years from very early offerings through Craigslist, to more formal offerings and ability to use credit processing through eBay to the expansion of small and mid sized retailers on the Amazon platform. These show the progression of both the services and the growth of collaborative capabilities into a collaborative marketplace.

I see the common thread through this time period as a platform or portal that provides consumers and vendors a framework that supports back office type services that the small vendors either do not have the capabilities to support, or the desire to create the capabilities.  As we progressed through the timeline what I see is the growth of these services into a type of back office framework of services that can be utilized to support the eCommerce channel services. This is another example of the Amazon focus on evaluating current conditions and capabilities and then to experiment and develop services and capabilities that extend the current services in new ways.  In my opinion this is the most significant capability, or practice, that drives the success of Amazon - the focus on experimentation and the encouragement from leadership to experiment and fail forward.

The results of these actions and especially the growth and potential of the collaborative marketplace are probably the most significant potential development in the recent years.  What we see now with the advertising from Amazon focused on the small artisan type retailers that can be found on Amazon highlights the work that has taken place up to now. This shows that the experiments by Amazon in their offerings to consumers and small retailers to utilize the Amazon services have been successful and are now ready for Prime time.  This shows that Amazon has also recognized the potential and so are now pushing forward, the Amazon cloud services also play a large role in these new services and especially in the ability of Amazon to quickly expand and grow volume and capabilities. This is a fascinating time to see these collaborative services coming to the forefront of retail and these will also drive the next market disruption and the large legacy retailers must recognize and adjust to this new reality.

Omni Market Developments

The omni market, and especially the collaborative network supporting the opportunities of the omni market across all participants from consumers to retailers to the supply chain and the specialized partners in these networks has unquestionably allowed retailers to incorporate and develop the capabilities that allow them to not only support the demands but also to incorporate the changes that will disrupt the retail market as well.  I see this collaborative network as not only a means to support the demands of consumers but also as a means and tool to disrupt the market as well. This collaborative network provides a great tool that can equalize the playing field for small retailers and a tool that can disrupt the market and the capabilities of the largest players that have in the past been able to exclude the smaller players simply by the cost and the difficulty in attaining the capabilities to participate in the market.

Over the years there have been many eCommerce sites such at eBay and Overstock that have provided outlets for people and small retailers to sell over the Internet through a robust channel.  Amazon is another example of a major eCommerce retailer providing a channel for small retailers and individuals to offer their products in an environment where these individuals can take advantage of the full power of the Amazon channel through search and simply consumer reputation to take advantage of opportunities that would not have been available not that long ago.  We are seeing a maturity in the services offered by these types of eCommerce channels over the last couple of years and these services are all taking advantage of the opportunities and capabilities offered to enhance the breadth of their market reach without a large investment in technology.

I see the key in these developments and services to be the quality and robust nature of the service and also the market reach available from these services for small to mid-sized retailers that allows these retailers to compete in the marketplace like they never have in the past.  This is where the true benefit to these small retailers is being experienced and even more than the benefits to the participants, these offerings are again disrupting the marketplace by introducing a new level and avenue of competition to the major legacy retailers. These services really give these small retailers the same reach and capabilities in the eCommerce marketplace that the large retailers invested many years and large amounts of cash to develop.  This may just be the greatest impact of Amazon on the retail marketplace; developing and supporting a collaborative network that allows the small retailers to compete in the marketplace without a huge investment.

This is obviously not done by Amazon because they are such nice guys.  Amazon sees an opportunity and they are quickly developing this opportunity to expand their reach and offerings without an investment on their part, other than making available to small retailers the same services offered to the consumer by Amazon.  This will bring more people to visit Amazon and give more reasons for these visits to extend in the time that they remain on the site and increase the likelihood of purchase. Amazon in the end will be making money in all cases and this is just a great investment in the future for Amazon.

Omni Market Collaborative Network

The explosion of the omni market on into the retail marketplaces is really more of a slow burn that has finally reached the point of open combustion which translates to market disruption.  This omni market disruption is similar to the supply chain disruption as far as it relates to the impact of the collaborative network on the breadth and depth of the disruption and also in the fact that there is a small number of change agents across these networks that have driven the capabilities that have driven the disruption.  The collaborative network though provides the framework to support and encourage the disruption through increased speed of open communication and collaboration across partners. Again though, and especially in the retail market place, there are leaders and followers in the growth and expansion of the network that in turn is driving the expansion and growth of the network and ensuing capabilities.

The collaborative network though provides the framework for this disruption driven by the omni market and this collaborative network provides the framework and the capabilities to connect to other collaborative networks like the supply chain network to allow the two networks to work together in a social network framework.  This social network framework allows the partners in the networks to easily and efficiently connect and collaborate across the each of the extended networks in a type of organic networking that encourages and supports new connections and relationships as they are identified and realized. These relationship networks are the key to the growth and continued change capabilities that has become the norm in these marketplaces.

I think that Amazon probably best portrays the type of practices and capabilities that demonstrates the capabilities and the strengths of the collaborative network across all partners.  Amazon has pioneered the type of collaborative interaction with partners and develop new capabilities and changed the retail marketplace to pioneer omni market practices and capabilities.   Amazon has continued to expand their capabilities through the collaborative partnership network and this extends from the supply chain through the collaboration and partnership with small retail partners in a mutually beneficial collaborative partnership that allows both Amazon and their small retail partners to support market demands.  This example of the type of capabilities possible through the collaborative network should be reason enough for other retailers to expand their participation.

Retailers should use these developments and resulting growth in the omni market to justify the expense and the practices that will allow them to plug into the omni market collaborative network to engage and support the omni market demands.  This is really not an optional or nice to have capability, this is really cost of doing business and the importance is growing in leaps and bounds. The large legacy retailers have focused on the operational capabilities necessary to support the omni channel marketplace and now must expand their focus into the collaborative network capabilities to support the omni market demands.  The strength and a key benefit to these collaborative network capabilities is that the large legacy retailers already have an entrance and experience with this type of network through their supply chain network

Supply Chain Market Teachings

The business marketplace, and especially in this global economy, can learn a great deal from the experience and the practices, especially in the areas of continuous improvement and collaboration.  I put this out for consideration and evaluation because it seems simple to me and yet so difficult for many to realize and embrace. The global supply chain is a practice based on flexibility and collaboration that not only meets the demands of the marketplace and also provides guidance and new capabilities that are themselves disrupting markets through both capabilities and collaboration.  These are the very capabilities that can bring dramatic benefits to other markets and frankly, one of the most surprising aspects in my opinion is that these practices and capabilities are not recognized and reproduced by other market segments and participants to improve their own capabilities.

I think that the retail marketplace and especially as it relates to the omni market is probably the single greatest example of a market segment that calls out for the practices and and capabilities represented by the supply change collaborative practices.  The omni market is really a sister type of market as the supply chain from the perspective of a market that requires the interaction and support of many partners, technologies and functionalities in order to meet the demands of the market. In addition the similarity also includes a focus on shaping and disrupting the market.  These points together lead to the projection and positive comparison to each other. The challenge for the omni market though is the maturity of the collaboration and the culture of command and control that remains.

Another challenge for the omni market retailer is the engineering practice of continuous improvement and more importantly the discipline to maintain the practice over a long period of time.  This continuous improvement practice is the key to success and foundation of the collaborative partnership that drives the supply chain and will be required to drive the omni market collaborative partnership development.  Without this continuous improvement practice and especially the discipline to maintain the practice I am afraid that the omni market retailers will not be able to maintain the practices that allow the retailer to sense and respond to change.  This ability to sense and respond to change and direction in market conditions is one of the critical measures for success in the omni market.

Fortunately for the omni market retailers they are already connected into a network of collaborative partnerships through their connection and relationship with the supply chain network.  The retailer must, however, create their own collaborative partnership network that connects and builds collaborative relationships with their critical suppliers for product, connectivity service offerings and social networking.  This is truly a social networking type of organism that utilizes the social network methods and connectivity practices to develop and extend their own market. This omni market network provides an opportunity for partnerships with suppliers for both their partners and their competitors.  As an example, all retailers in the market utilized UPS, FedEx and USPS for parcel shipments to their customers in various levels of volume and capabilities. These connections work because the end goals of the competitors are similar and the competitors have a separate relationship with the carriers.  

Supply Chain Strength Through Collaboration

The supply chain has always been under an intense level of pressure to contain costs while improving services, and service levels, and this pressure has required, or forced, the supply chain to develop a strong network of partners that can provide on-demand support of services.  The supply chain first of all is built on the partnership of the many service providers, contributors and the users of these services such as manufacturers and retailers that depend on the supply chain for their livelihood. This network of partners supports the ability of the supply chain to meet the demands and also new services that are changing the marketplace.  The supply chain depends on a strong network of collaborative partners and service providers to deliver benefits and services from one end of the supply chain to the other end.

The supply chain has been at the receiving end of almost overwhelming demands to improve services and reduce costs for retailers, manufacturers, carriers and intermodal partners and as s result, the supply chain has been forced to develop a collaborative network of partners that can quickly and efficiently react to changing demands.  Rather than breaking under the pressure of these demands, the supply chain developed into a collaborative network with a large number of specialized partners providing the services, as needed, to react to the wide array of pressures and demands. This puts the supply chain in a position of strength supporting the needs of the partners across the chain.  The various pressures from customers, weather events, changing marketplaces could have only been met by a resilient and flexible supply chain of collaborative partners.

This collaborative partnership should be viewed as a case study in the potential of a collaborative partnership that not only supports the market demands but also actually disrupts and reshapes the market.  There are so many examples of successful change initiatives over the years that can be used as examples and benefits of the collaborative partnership. The supply chain requires support of disrupting factors in weather, materials  and changes in the global economy, the supply chain is really the tip of the spear supporting the demands of the global economy and the engineered approach and focus on continuous improvement has truly allowed the supply chain to meet these demands.  It must be understood that the supply chain is not perfect, however the continuous improvement practice provides a strong foundation of methodology and process address issues and changes as they are identified. This continuous improvement process provides a strong means for the supply chain to sense and respond to changes and issues.

Other marketplaces and participants would gain significant benefits by implementing the collaborative partnership network framework that the supply chain has proved to be resilient and successful in meeting disruptive forces.  The combination of the global economy and the improved abilities delivered through technology have combined to force the market into a path towards collaborative partnerships. I really do not see any other options that can react to and address the market disruption with the same level of resilience and success as the collaborative partnership framework.

Supply Chain Collaborative Technology

The supply chain has always provided leadership in the use of technology to delivery on promises and now provides leadership in the use of collaborative technologies and Internet of Things technology to deliver results and promise of new capabilities.  The supply chain is at the forefront of leveraging technologies and partner relationships to meet the changing demands of the marketplace. These technologies are focused on collaboration and extending capabilities in ways that not only support market demands but also and probably most importantly disrupting the market by combining technologies and collaborative practices.  The supply chain is best placed for these types of developments and experimentation because of the engineered practices that are part of the supply chain DNA and also the demands on the supply chain to control costs.

There is no better example than the experimentation in the supply chain with blockchain and drone technologies and capabilities.  The blockchain technologies provide support for market demands to track and trace products through the supply chain and the the drone technologies provide support for controlling costs and supporting capability demands in a changing workplace and workforce.  Over and over the supply chain has displayed an openness and drive to incorporate technologies that can support not only the demands of the market and also the demands of the supply chain to improve and increase collaborative capabilities across the supply chain partners.  These tendencies and drive to experiment with technologies to meet the demands of the supply chain market and partners only increases in velocity as time and technologies progress.

The supply chain must continuously renew and expand in order to adjust to the market demands and the supply chain in particular is a great example of a network that imitates a living organism in the collaborative network to support the demands of the market.  Again, these capabilities and practices in the supply chain network are the result of the demands of the market and the extensive partner network and increase in specialized service providers. The supply chain has long ago learned the importance of collaboration to support the market demands and in addition, the supply chain has also recognized early the importance of flexibility and especially specialized service providers to deliver on the specialized needs of the supply chain in an on demand basis.  These practices came about and were nurtured by the supply chain engineering foundation that incorporates the continuous improvement model to evaluate and incorporate change.

The market demands to contain costs encouraged the supply chain to develop a strong network of collaborative partners to support these demands.  This network of collaborative partners is probably the greatest strength of the network by providing the basis and framework to encourage the collaborative practices. I think that the collaborative partners provide the basis for the supply chain to grow and further disrupt the marketplace.  I see the collaborative partnerships as the single greatest differentiating factor between the supply chain network and other networks in the business marketplace. Like so many other disrupting developments across the many marketplaces, the supply chain has grown into this force through a series of changes and partnerships that have become a significant force for change.

Supply Chain People

People make the difference in the ability of the supply chain to innovate and drive market change.  This can, and has been said about many organizations many times and this is also true, my focus though is on the supply chain and why people are so important.  The supply chain still depends heavily on people to execute and this interaction must be taken into account when planning for execution and also for strategic planning and market changes and disruption.  

The supply chain is still heavily dependent on people to not only get the day to day activities completed but also for customer interaction and change planning and implementation.   The supply chain is an extremely volitile market form both a day to day support perspective to a change management and implementation perspective. It is fortunate for the supply chain market that there is such a strong relationship between the operational execution and the change forecasting and planning, without this close relationship there would be no way for the operational execution to keep up with the market developments.  The supply chain people are critical to the full suport of the supply chain market demands, and especially the interactions between opertional execution, customer demands, changing market conditions and demands for new services. The high degree of interaction is a key factor to the ability of the supply chain partners to support the market demands. The supply chain interaction is truly a type of social network that connects people and activities and schedules in a way that can be quickly and efficiently adjusted to meet the demands at hand.

The supply chain market is a vast network of connections supporting interactions and execution and this network is a small world of people connected to each other in a robust ‘six degrees of separation’ network where everyone knows each other through a finite set of connections.  This social network or connectivity is based on respect and trust in the capabilities and execution of activities across the network. The supply chain network provides a current example of how the business marketplace is expanding though social interactions and networks to building a living organism of supply chain partners and the people in these organizations are a key driving force in creating these social network connections.

I have been in this business for almost 30 years and can honestly say that my supply chain social network has grown with additions and very few subtractions.  The suppy chain network is truly made up in a social networking loose connectivity relationship model where connections are willing and open to providing introductions and referrals across the many layers of network connections.  I have always been amazed at the different range and breadth of connections that are available for the making across the network to reputable people. The supply chain network, like any other social network lives and dies by reputation and it is important to maintain a reputation and relationship with your network.

In the supply chain market and network there is a strong personal bond across the network and the people have connected and developed a very strong social network of connections that are open and willing to support their connections in an unselfish manner because it is understood that the connections is a two way street where mutually beneficial developments push the market forward.  I am not sure that there are any other practices that depend on the network and the people as much as the supply chain.

Supply Chain Partner In Change

The supply chain is one of the key driving factor and more importantly enabling factor in the market changes that have been hitting the market especially in the last few years focusing on enabling change in practices and capabilities.  The supply chain network must be viewed as a partner in change to enable the market to change in support of the market and consumer demands. This opportunity to develop and strengthen the ability to drive and react to changing market conditions simply cannot be met without a robust partnership with partners in the supply chain network.  This is really nothing new, as the supply chain has been such a integral partner in the market and changes to the market and the development and growth in their abilities results in the need for stronger partnerships. The supply chain partners came into the time of change with a great model for engineered continuous change and this has allowed the supply chain to react and drive change to meet the market demands.

These times of market upheaval require strong partners in change and the supply chain network can and must be viewed as one of the key partners in change.  The supply chain network can provide a robust framework to support this change model necessary to navigate through the market changes and disruption. The supply chain network has a great deal of experience in navigating change that can help their market partners to understand and even flourish in the market by adapting and embracing the change procedures that have allowed the supply chain to flourish.  The supply chain is really in the forefront of change and especially the practices that support the ability to sense and respond to change. This change model should be used to model the market change model used by other participants to help to navigate through the many and frequent changes.

What we have learned over the years is that large changes and market disruption start with a small initial change and this change grows and propagates changes that shape and change the market in a manner that can easily be overlooked until it is almost too late.  Take a look at the Internet and eCommerce as an example, this market has in reality be changing and shifting in fits and bounds and when you analyze the changes over months it is a quite different picture than when you review the changes over years. What this tells me is that it is critical to incorporate a robust change model that allows the partners to sense and respond to change and market developments.  In addition, this model requires a change in the culture to accept and embrace robust collaboration practices to help navigate the change.

Using eCommerce as a reference the point that stands out in my mind is the disruption and struggle of the large legacy retailer to catch up to the consumer demands and expectations.  This is because these retailers did not have a strong sense and respond change model and also because the did not have a strong culture or collaborative partnerships in their support network.  The supply chain network can provide the model and the practices to help to guide the market participants through the changing marketplace. This guidance and partnership in change is becoming more and more important as a result of the changes in the market and the increase in specialization in the partners.  The partnership network is becoming larger and more important to success.

Tuning Supply Chain Network

The supply chain is a key participant in the collaborative business partnerships providing a menu of services and partners to support the needs of their partners along with development of market improvements.  These market improvements and are driven by the imagination of the partners as well as the demands of the market. However there are two additional activities that are key contributing factors to the partnerships that provide a basis for market disruption; review and tuning of the supply chain network to support a continuous renewal process and imaginative partners to spark creativity.  The value of the network is in the partners involved and not in any one individual. This is very different than any past experience or market participant, this is the expansion and growth of the social network practices and capabilities into the commercial market.

These networks require a continuous tuning in the way that services are provided, in the types of services provided and most importantly in the partners participating in the network.  There is a continuous growth and change in the network that both reacts to the market and directs the market, this is a new type of disruption in the market that feeds on itself and the needs of the partners.  The partners in this network are truly dependent on the other partners in the network because of the level of specialization and because of this dependency there is a very high requirement to also continuously tune the network to sense and respond to change.  The change can come from many different directions and also many different partners and even markets.

Tuning this network is the result of a robust collaborative continuous improvement process based on frequent open and robust communications along with a desire to experiment and change.  These improvements come from many different directions and not just the market influences. The integration changes and grows into other markets and networks based the requirements at the time and the reaction and communications are growing and changing along with the networks.  The collaborative and networking practices are being driven by the entry and growth of millennials in these networks. The entry of millennials first changed the shopping and purchasing practices of consumer industry and now they are changing the work practices and collaborative networking practices.

These changes are being embraced by the supply chain now because they are a natural fit to their needs and practices.  The supply chain extended network is a natural fit to these practices and the network is ripe and open to embracing the change.  The supply chain has always embraced change and this change is no different. The supply chain network will expand and grow in new and creative ways that bring together new practices to deliver new capabilities to the supply chain network and in so doing will surly disrupt the markets that are engaged with their services.  There is a need for continuous tuning in the supply chain network to support new practices and also to update and improve current systems. The marketplace is changing and the supply chain network is playing s significant role in this change and this is because the supply chain is a natural partner in change.

Collaborative Breakthroughs

The network of specialized organizations supporting the markets are similar to a living organism that is made up of millions of specialized organisms that come together to make a larger organism, whether plant, animail, fish, bird or human they are all made up of specialized organisms held together in a type of collaboration that supports the well begin of the organism.  The business environment has been moving towards a model of specialized partners brought together through collaboration and contractual agreements to support the well being of the business market. This business organism is made up of similar relationships and collaboration of partners and service providers that cannot survive without the relationship and support of the larger business organism, or marketplace.  These relationships are supported through a series of collaborative relationships that both drive the business marketplace forward and the nature of the relationships support the regular delivery of breakthroughs.

These breakthroughs are delivered regularly through the collaboration of thoughts and concepts that can be repurposed to support new features and functionality.  These developments are made possible by collaboration of the specialized partners and because of the increased level of specialization these breakthroughs are able to be delivered at a greater velocity.  In the past, breakthroughs were delivered through hard work, intelligence and imagination of individuals and now these capabilities are produced through the specialized partners in the market collaborating to experiment and deliver the breakthroughs.   Now we have this organism model of relationships that eliminate the friction of collaboration through technology and communication improvements that encourage the collaborative breakthroughs and a greater and greater velocity.

This generates a velocity of change in the marketplace that requires the participants to ‘plug into’ the organism in order to reap the benefits.  This has been a difficult challenge for the larger companies because this model of collaboration is at odds with the larger legacy organizations’ culture.  Unfortunately for the larger legacy companies the have created an organization that does not encourage experimentation and open collaboration because of this culture of command and control.  The effort required to change this culture must come from leadership and the question is not really whether this is done but when it is done.

Collaborative breakthroughs are driving the market organism now and they will quickly leave companies that are not plugged into this collaborative network in the dust. The collaborative network is becoming a living organism made up of partners and their relationships among and across the network in support of each other.  This social collaborative provides the framework for the network to redefine the market in which they are focused through the sharing of ideas and the capabilities to turn the ideas into reality. These networks will only grow based on the needs of the network partners and the imagination of the partners in defining new capabilities and breakthroughs in the market.

These networks cannot help but to make breakthroughs in their capabilities and also disrupt the market in which they are focused.  The methods are driven by the imagination of the partners involved in redefining their own market and these forces are only going to increase the velocity of change and breakthroughs because of the structure of the market.

Market Based Solutions

Third party logistics providers and their key partners are focused on market based solutions to meet the demands and most importantly to shape the market through new services.  This is really a key strength of third party logistics providers and they bring the skills and expertise to the problems to deliver market solutions. This difference in the third party logistics solution model is that the solution delivered can generally be utilized to produce a solution that they can then use across the marketplace.  This model is huge when it comes to moving the market forward to change the expectations and also change the market capabilities to support change demands of the customer and partner. This is a new outcome that would not be available if the third party logistics providers did not have the expertise and the bandwidth to support the demands and deliver market solutions that can be used be customers and partners across the marketplace.

This is very much the same model as modern ERP software and Human Resource service providers.  The key difference between the ERP capabilities and the supply chain services capabilities is the ERP capabilities are delivered through software that is installed in the customer environment while the supply chain third party logistics providers outsource the functionality.  In both examples though the impact on the market is similar; the ERP software has revolutionised business management while third party logistics providers are leading the delivery of market changing supply chain solutions through flexible technology and integration with partners.

These supply chain market solutions would not have been possible 20 years ago when the greatest supply chain initiatives were driven  by the largest players it the marketplace through their own inwardly focused initiatives. During those times the supply chain solutions were focused on the benefits of an individual company and the partnerships were a one-way focused relationship.  The recession broke this model when the large organizations focused on their supply chain for cost savings and reduced staff while driving for cost savings. This provided the third party logistics market to scoop up the experience and expertise and they took this opportunity to focus on their solution offerings and also to partner with other service providers in the marketplace to deliver solutions that are now changing the marketplace.

This is the beginning of a new age of market based solutions that shift the focus to the solution meeting the demands of the entire supply chain market through a collaborative base model that benefits all of the participants.  This model is furthered through the increase in specialization in the market and solutions that in itself requires collaboration and partnerships to build and deliver solutions. The challenges in solutions now are being met through collaboration and partnership rather than command and control.  Thes collaborative practice requires a robust and flexible framework of technology and communications methods that were not possible even five years ago.

This focus on market based solutions put together through partnerships with specialized service providers supports a model that supports speed of service delivery and the ability to select and provide services based on your own specific needs while the service providers are able to focus on a wide range of services that move the entire market forward.  This collaborative framework supports the changing demands of the participants with a lower level of investment from each of the participants in the partnership.

Specialization and Collaboration In The Supply Chain

Over the last few years there has been a rise in the level of specialization and outsourcing in order to provide a greater level of focus on processes and functions that make and organization stand out.  This has increased the level of outsourcing for these functions that can be performed better by a partner that specializes. Human resources and supply chain quickly come to mind as business functions and capabilities that are extremely important to a business and are functions that can be quickly and effectively transitioned to a service provider that specializes in the function.  This practice is growing and flourishing now as organizations realize that their success depends on their ability to deliver and the rise of specialization allows them to outsource functions that others perform better.

The rise of this outsourcing model has been fueled to a very large extent by the ability of the providers, increased velocity of change and probably most importantly, the improved communications and integration technologies.  These outsource service providers have spent years focused on capabilities and integration and this has paid off now for both the providers and their customers and partners. This is especially true in the third party logistics market where providers have spent years consolidating and developing capabilities to not only meet the demands of their customers in addition these providers have truly been shaping the market through strategic development and partnerships.  

I strongly believe these advances in the marketplace would never have been realized without the push from the last recession.  The reductions in labor and other cost cutting measure taken by major companies to weather the recession put in motion the forces that brought resources together and the technology advances drove the experimentation and and changes that are currently disrupting the marketplace and driving towards specialization of the partners in the marketplace.  This specialization is driving collaboration across the partners which in turn is driving a level of transparency and flexibility that is fueling the change.

Change is good and these changes in the marketplace has reach a level where the change is fueling more change and expansion of collaboration and further specialization.  Collaboration when coupled with advances in communication and network technology provides opportunities for further specialization and more change in the market. I find this process fascinating as it grows and expands through the market expanding from the seed of despair from the recession and disruption of lives by many companies large and small and now it is truly taking on a life of its own as the virtual world and virtual relationships take hold and grow.

The market and the participants, partners and customers are at a point now where the change and the process of change have taken hold and now the change and the market are feeding each other and encouraging to grow and expand.  The collaboration encourages participation and growth while the specialization encourages collaboration and partnerships in order to survive. The is the new world order of business and relationships and it is being encouraged to expand and grow into  a force that continues to grow and expand to continue to disrupt the market. It will be an interesting ride that will have many pitfalls and many benefits and most importantly it will be the only game in town.