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Author's profile photo Srivatsan Sundaravaradan

Levels and types of collaboration across the supply chain

 The level of collaboration can be viewed in multiple perspectives. One of the perspectives which is straight forward and simple is thinking in terms of people and team, starting from the basic level of internal teams till external multi organization collaboration.

  • Level 1: Members within a team
  • Level 2: Cross-team, same unit
  • Level 3: Cross-unit, same org
  • Level 4: Cross organizations, tactical
  • Level 5: Cross organizations, strategic

Level 1:

Members within a team working seamlessly within themselves is the least level of collaboration as this is very critical and the starting point for establishing relation with much larger teams, unit, org, etc. In logistics, for example: all the members of raw material procurement team collaborating frequently (exchanging relevant information) to align on the tasks, plan efficiently, avoid repetition, understand suppliers, exchange information and so on.


Level 2:

This level of collaboration involves teams from the same unit collaborating to achieve the unit’s goals.

Example: All the procurement teams when work together and collaborate, yields much better results – reducing redundancy and effective workload share.

Level 3:

Cross-unit collaboration is key in targeting the organizations success and to deliver better outcomes. Procurement, sales, manufacturing and other units in an organization when works together and collaborate can bring magical results.


Level 4:

Cross-Organizational tactical collaboration involves two or more firms working on meeting a defined agreement or achieve a desired outcome. For example: external vendors/firms who supply needed materials to a company should better understand the needs of the company. Better collaboration at this level can result in stronger long-term relationship.


Level 5:

On strategic level, multiple organizations can collaborate to define, drive and discuss about the industry/vertical. This is ultimately beneficial as they play critical role for the organizations long term decisions and strategic planning.

For example: LCV manufacturers and Battery manufacturers collaborate on strategic moves for Electric vehicles.

Let us look at some of the supply chain networks that creates and adds value to the business through collaboration.


Buyer and supplier collaboration is key to the success of any business transaction. When they are on a network there are enormous benefits. It is a win-win for both the parties as suppliers can find the right customers to whom they can provide services/goods to. At the same time, buyers can scout for the right supplier who fits the criteria. These networks can also ease the pain of back and forth data movement such as proposals, contracts, orders, invoices, negotiations, payment details, etc which saves lot of time, effort, people and accelerates the transactions. The network is visualized as a digital marketplace of buyers looking for goods/services and suppliers who can provide the goods/services.


In the era of Industry 4.0, physical assets are equipped with sensors that measures all critical parameters of the asset. With the advent of latest technologies, the physical asset can be represented digitally – called the Digital Twin which mimics the physical asset. The asset is manufactured, sold to a customer who operates it, and also is serviced by a service provider/in-house team. How cool it would be if the manufacturers, operators and service providers are on a network to exchange information?

Asset data such as master data, operational data, service data, etc can be shared with chosen stakeholders resulting in single source of truth, real-time data visibility , ability to quickly update the asset information, monitor the asset, schedule the right technician to fix problems, predict the failures, understand the asset overall lifecycle and operating conditions.

Some of the benefits could be: OEMs can access the operational and breakdown data in order to fix issues or enhance certain design/manufacturing aspects of the model in future.

Maintenance service providers can get access to the issues, breakdowns (and can also predict) of the asset to plan for the optimal schedules to minimize downtime.

Operators can update the operating manual (based on OEM’s update to manual), visualize the services, Cost incurred on the asset, get maintenance updates, provide feedback and get response for critical queries, etc.


Manufacturing network would provide the required level of traceability and transparency needed by supply chain and production units get the required information about the changes and updates of the overall supply chain flow in order to react to them. Production managers for example can collaborate with the supply chain (and even within manufacturing) stakeholders to get relevant information, view real-time reports (For e.g., planning , demand forecasts, plant wise  and so on) to achieve delivery commitments, respond to design changes immediately, understand the current need from the production units thereby improving customer satisfaction and brand protection.


Having to deal with logistics or goods movement is usually complex as it involves many parties – freight forwarders, carriers, shippers, warehouse managers, etc. Having them on a network can solve the disconnect that exists when they operate in silo. Some of the benefits could be: Having a clear visibility into each of the aspects would enable smooth goods movement, finding a new trading partner becomes easier, inter-company collaboration made simpler, easy to notify and alert stakeholders on the network, real-time visibility into the status for better tracking.


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