Innovation in the supply chain is helping top companies around the world decrease lead times, minimize risk, cut costs and drive growth. To create this type of supply chain innovation in an era of rapidly changing markets, geographic shifts and expanding capabilities brought on by new technologies, successful businesses are increasingly turning to collaboration with other industry members – and sometimes even with competitors.

Below, find five ways businesses are pooling resources in order to drive supply chain innovation.

Seeking Opportunities with Competitors

Forming relationships with competitors in order to drive new growth might seem counterintuitive, but it is bringing unexpected advantages to businesses in many industries. In particular, businesses in new industries can gain new visibility by partnering with their competitors.

1 + 1 = 3. The important part is for the business opportunity to create synergy between the competitors while working together. 

Joining Industry Clusters

Industry clusters, also known as business clusters, are concentrations of businesses in the same geographic area that bring about a competitive advantage through a concentration of resources. The theory behind industry clusters was spearheaded by Harvard Business School professor Michael Porter in The Competitive Advantage of Nations.

Businesses located in the same geographic area whose competencies complement each other can collaborate, whether formally or informally, in industry clusters. When they work together, industry cluster members create greater growth potential and increase their competitive advantage.

Sharing Technology in Supply Chain Innovation

All leading businesses recognize that innovating their processes and technologies is imperative in the globalizing economy, but not every company has the resources to facilitate the research that would lead to streamlined operations. 46 percent of manufacturers alone reported limited operational and financial resources as the biggest blocker to their efforts to innovate in a survey conducted by KPMG. Sharing technology, then, is one way businesses are bypassing financial restrictions to drive supply chain innovation.

Establishing R&D Partnerships

Besides sharing technology, innovative businesses are also establishing R&D partnerships to drive supply chain innovation. Such partnerships generate a much higher return on investment from research efforts by spreading research-related costs across multiple businesses.

Collaboration with Suppliers

One factor preventing improvements and supply chain innovation is a lack of supply chain visibility. New technologies, however, are allowing for increased transparency and trust between suppliers and their customers. In the future, increased supplier transparency and supply chain innovation will lead to shorter and more reliable supply chains.

A New Way to Find Partners

As advancing technologies and localized industry clusters push businesses to pool resources, we can expect to see supply chain innovation move at a faster rate than ever before. Such innovations will decrease lead times, create stability and, ultimately, encourage more collaboration.

If your business is looking to enter a technology, research or any other partnership in order to innovate your supply chain, post your opportunity on Powerlinx to connect with the right businesses.