Strategic Supply Chain Management - Supply Chain Online

CHAPTER 4 Core Discipline 4: Build the Right Collaborative Model 157
grade are not available, both sides negotiate until a mutually acceptable
solution can be developed. The production schedules for each company
are then adjusted in response to these inputs.
An additional indication of how tight this relationship is can be
found in how each partner pays for the material used. Each company monitors
the volume of product flowing between the factories. At the end of
each month, the aggregate data are reviewed, any discrepancies are reconciled,
and a summary invoice is produced. Since prices are set during
negotiation, only the volume requires reconciliation.
An Example of Mutual Gain
Today’s technologies offer the opportunity to manage business in ways
previously thought impossible or, at the very least, implausible. Even
though a capability may be technically feasible, setting up a process that
leverages that capability is not always necessary. Indeed, in many cases it
is not at all appropriate.
Many effective collaboration strategies are not reliant on technology.
Despite the hype associated with business-to-business (B2B) solutions
that seems to envelop many supply chain professionals, most companies
find that many of their prospective partners simply lack the technical
sophistication required to participate in a collaboration process that is
based on the use of complex information systems. Remember that transactional
relationships are still considered collaborative; just because your
systems are not “seamlessly integrated” with every sheet-metal shop and
plastics molder who supplies your manufacturing operation doesn’t mean
that you are not working collaboratively. In fact, relationships all along the
collaboration spectrum may be extremely effective but make little or no
use of the advanced capabilities offered by supply chain collaboration systems
vendors.
Jamba Juice is a San Francisco–based retailer that operates stores in
25 states throughout the United States. The menu at Jamba Juice stores is
simple; the chain sells made-to-order all-natural smoothies, as well as a
variety of freshly squeezed juices, baked goods, and other snacks. All
items are created with the goal of balancing “great flavor” with “powerful
nutrition.” 10
Jamba Juice’s suppliers include large fruit and vegetable growers.
The company establishes long-term contracts in order to ensure availability
of supply. “We can’t strike a deal with Mother Nature herself,” explains
Joe O’Neill, Jamba Juice’s chief financial officer, “so we have to get creative
when it comes to getting as close as possible to guaranteed availability
of the produce we need.” And Jamba needs a lot of produce—the