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.