Collaboration Is Key To Global Success

HEADNOTE

Shift toward less integration among manufacturers and their suppliers and customers needs to be reversed.

AT A TIME WHEN IT'S BECOME INCREASINGLY EVident that collaboration with customers and suppliers is

critical to global success, more U.S. manufacturers are becoming less integrated with their partners, according to findings of the 2005 IW/MPI Census of Manufacturers. Could it be, as the recently released executive summary states, that, "In an era of relentless price chopping, long-term relationships may be taking a back seat to dollars."?

Associate Editor Jonathan Katz explores these findings, in "Drifting Apart" (Page 21), and identifies what appear to be perfectly rational reasons for the drop. However, lest we confuse logical and even understandable reasons with good reasons, it's useful to remind ourselves of the benefits of collaboration.

Most of the IW research that seeks to uncover best practices and beneficial strategies finds collaboration to be among the top most effective. For example, for the 2005 IW Value Chain Survey, conducted in partnership with IBM Corp., we asked purchasing executives which procurement strategies are most effective at contributing to increased profitability and reduced cost. Their answer? More than 62% of respondents said supplier collaboration, more than the 51 % that chose global sourcing of direct materials and the 34.2% that cited spend analysis. (The amounts do not add up to 100% because respondents could check all that apply.)