Strategic Supply Chain Management - Supply Chain Online

CHAPTER 4 Core Discipline 4: Build the Right Collaborative Model 155
To initiate the relationships, Alcatel management invited executives
from each prospective partner to participate in a business outlook forum.
The executives discussed the impact of the severe market changes on their
business and how their companies could better collaborate to streamline
processes and lower costs. Another goal of the forum was to assess more
subjective criteria—including cultural fit and seeming willingness to commit
to a collaborative relationship.
“We knew that the key to greater supply chain flexibility would be
to better understand the process handoffs and then augment the existing
systems with deeper, collaborative processes,” says Danny Wade, senior
vice president for quality. Wade notes that applying this approach to all
customers and suppliers would not have been practical. “We were very
deliberate in crafting our ‘guest list.’ We needed to make sure each partner
recognized that we were all in this together, and we needed to avoid
unnecessary complexity.”
By the end of the forum, each executive had committed to finding
better ways to collaborate and to developing a conceptual design
for a coordinated collaboration model to address forecasting, order
management, inventory visibility, and performance measurement. The
model would include roles and responsibilities, process flows, business
interfaces, and operating rules, in addition to information technology
(IT).
Then Alcatel senior managers worked with the partners to define the
detailed guidelines needed to support the conceptual design. Finally,
Alcatel piloted the collaboration model with a key product that created
demand for the partner companies, had market momentum, and required
the coordination of both internal and external manufacturing operations.
Some of the partners helped Alcatel with supporting IT solutions to augment
the process guidelines, including new reports, additional logic, and
Web-enabled views into work in process. All partners agreed to share data,
synchronize their planning calendars, and respond to standard demand
requests within three business days.
The new collaboration model reduced planning cycle times by 50
percent and sharply reduced end-to-end inventories. “We’re able to better
match our supply to our customer’s demand,” says Mike Quigley, chief
executive officer of Alcatel USA. “More important, by involving customers
in the problem definition, solution, and pilot, we increased their
commitment to broader improvement initiatives. They’re excited about
working with us, and we’re enjoying a closer business relationship—one
based on facts, not feelings.” 7