How Business Valuation Increases with a Collaborative Supply Chain
Collaborative partnerships that are fully utilized to offer complete optimization will not materialize without warranted risk potential – nor should they. After all, the upside to developing a scalable end-to-end supply chain partnership with International Transportation Management (ITM) experts who are best suited for your particular business will consistently yield low risk with high reward.
When you effectively outsource your entire supply chain and international business to a competent third party, your company’s value instantaneously increases by (1) allowing high level collaboration on complex logistics issues with industry thought leaders and (2) through implementing end-to-end optimized procedures strategically developed for streamlined efficiency.
You Can’t Win for Losing – The Vicious Cycle of Chasing the Best Cost
Set the scene: Supply chain executives are under constant scrutiny to increase the value of their company’s bottom line through lean and unrealistic cuts in the logistics sector. The complexities of supply chains are increasing while the relentless pursuit for bottom-dollar costs become highly prioritized. This conundrum of universal supply (chain) and demand laws are simply impossible to facilitate.
Solution: A newly conceptualized approach to supply chain management – End-to-End Collaboration. We’re no longer dancing around partial departmental collabs, but rather top to bottom, start to finish, inception to unpackaging at destination type of entrusted partnerships.
This thoroughly comprehensive allegiance will continuously spotlight the need for progressive improvements based on evolutionary innovations taking place within the industry.
“But end-to-end optimization is not easy. It demands that supply chain partners shift from traditional transactional business models with the focus on cost savings to models that shift the focus to value creation. The winners of today’s supply chains have made the shift to focusing on value creation, enabled by true end-to-end collaboration and win-win pricing models. By working as true partners with a more transparent, win-win mindset, parties can identify opportunities that they simply cannot see by working within their four walls. The longer-term strategic focus, coupled with transparency and a win-win approach, motivates suppliers to invest in solutions they likely would not feel comfortable with.” [Logistics Management]
Creating value does not come without first systematically understanding the difference between extracting value, exchanging value, and then finally hitting the mark with the prefaced, value creation.
Step 1: Extraction
Extraction takes place when one link in the supply chain attempts to remove or extract power from another chain and placing it on a key player by employing power negotiations and integrating a competitive bidding strategy. This is a win-lose situation. If you will recall from the quoted text mentioned above, we’re in search of a win-win scenario.
Step 2: Exchange
An exchange of value may move up the business morality meter, but still fails to deliver on collaborative best practices due to the confinement of interaction and alternative collaborators. The solution comes in the next step.
Step 3: Creation
All good things come to those who work together to achieve a creative solution based on thoughtful and insightful collaborative work. Sounds too good to be true, doesn’t it? Simply put – it’s not, and in all seriousness, collaboration is the sole driving force behind a fully optimized supply chain. Optimized, in this sense, with the successful implementation of streamlined procedures and cost-effective initiatives.
Unlock Your Supply Chain’s Optimization
For the collaborative process to truly work, conventional procurement procedures must be replaced with progressive ideologies that have shifted to more sophisticated business models intentionally designed for value creation.
In order to fully utilize supply chain potential, it’s critical to facilitate collaboration to deliberately present strategic solutions to any complex logistics issues your company may face. This allows for an easily scalable approach to grow within your respective industries.
“Win-win economics makes sense when you think about an equity partnership (e.g., a joint venture) because both parties are investing with the hope to drive value for the partnership. A Vested business operates in a similar manner as an equity partnership – but unlike an equity partnership a Vested model uses a buyer-supplier relational contract instead of shareholders agreement.” [Source]
Complete ‘Valuation Optimization’
When a business has the ability to expand creative reach across their entire supply chain by utilizing an outreach approach to maximize cognitive volume, complete valuation can be achieved.
Restricting collaborative capacity to your employees alone will stifle overall potential that could otherwise be optimized on a comprehensive level, end-to-end. Top tier executives are searching for progressive techniques, involving relevant software and various tools, in order to procedurally organize and highlight hyper-relevant performance indicators. These granular KPI’s are what’s needed to track advantageous progress in comparison to current strategy employed by direct competitors.
We understand that the successful integration of a trusted collaborative team is no easy endeavor, but this should not discourage implementation attempts. Your supply chain (and bottom line) will directly reflect your efforts. Be prepared to dive deep into the nuances of this operation with plenty of forecasted resources.
Every day, we help middle market companies solve difficult logistics issues. These solutions range from routing and transit options, to warehousing and storage solutions, Customs and regulatory compliance, tools for financing the transactions, and the technology to support the entire operation.
If you have any questions or need information related to any of the following, please contact our collaborative solutions team today:
· Need help determining the HS Code for your product?
· Need help determining the duties, taxes, and free trade opportunities for your products?
· Need help determining whether your product requires an import/export license?
· Need help determining the most cost-effective way to ship your product best on a series of constraints?
· Need help determining where to locate your warehouse for optimal distribution?
· Need help to determine whether any other government agencies regulate your product?
· Need help responding to US Customs and/or protesting a matter with US Customs?
· Need help seeking guidance from US Customs?
· Need assistance with determining overseas Customs and Regulatory requirements?
· Need information about financing options for your product?
· Need information related to insuring your product?
· Need information about other financial instruments to protect payment and mitigate your risk?
Managing your international business, end-to-end.
Our clients understand the value of the logistics process. They know that supply chains, not businesses, compete. We work with leading middle market companies to build their strategic advantage.