There is increasing evidence that companies that excel in managing their supply chains repeatedly outperform their rivals (Accenture, 2002). It is also increasingly clear that companies must collaborate with suppliers and customers to respond to market needs. Such collaboration, while often beneficial, may result in challenges that we refer to as pain points — that is, specific and well-defined aspects of SCM that are hindering smooth flow and ability to innovate in a firm’s supply chain as perceived by senior supply chain executives.
An understanding of current supply chain pain points is essential to coming to grips with the role of collaboration and the trust it often implies in the chain. Collaboration is most likely to arise in response to certain pain points, and its development may well generate additional such points.
Our review of the 10 pain points identified indicates that trust and collaboration are becoming both more valuable and more costly as supply networks increase in complexity and global manufacturing becomes more competitive. Our findings also illustrate the confusion that occurs as decision makers toggle between collaborative and transactional relationships.