Multicompany Collaboration to Reduce Costs—Who, What, and How

This chapter guides the reader toward decisions about who, what, and how to achieve retail supply chain collaboration to reduce costs. The who discussion proposes a screening process for confirming which partners are worth the teaming effort. The what discussion focuses on the type of collaboration using models for information exchange and decision making. The how lists types of collaboration appropriate for initiation by different supply chain partners—retailers, service providers, distributors, or manufacturers. The chapter describes a methodology for confirming the trading partners with whom the company wants to collaborate. It explains the options presented in greater depth. A helpful tool from the inventory management discipline is called inventory activity-based costing (ABC) analysis or distribution. The other ABC, activity-based costing, is a good way to document the costs. An ABC analysis might prove them uneconomical.