From the telegraph to wearable devices, supply chain collaboration in the modern era has come a long way by Jon Hansen

Posted on September 29, 2014


It was the late 90’s, and I was heading up a project that would enable the Department of National Defence to acquire Indirect MRO spare parts online from suppliers throughout North America. The challenge went beyond the mere sourcing process, as the DND required that parts be delivered within 24 hours to one of their 40 bases across the country.

To provide you with a point of reference regarding the weight of the task, back then we still used physical catalogs and the good old telephone to source products.  All dog eared with a random spectrum of colored post it notes highlighting the pages of previously sourced parts, including the supplier through whom the product was purchased, this was hardly an example of effective communication.  Let alone being online, and in real-time.

In terms of shipping, it was a separate and often vague exercise in which the effort to actually calculate the landed cost was more complex than following the Abbott and Costello “who’s on first” routine. In fact, this is the reason why so many buyers would simply base their competitive price analysis on just the cost of the part itself, leaving the shipping “details” to the supplier.  On a side note, the majority of suppliers made their money by low balling the cost of the part, and charging a premium for shipping and handling.  One day I will have to tell you how the largest PC integrator in Canada discovered that when shipping was included in the true “landed cost”, they actually lost money on each transaction.

The point of this walk down memory lane is that we have come a long way relative to how we connect and communicate with our supply partners today.

“For the first time, buyers and suppliers have the opportunity to connect to a common platform, without the need for prior negotiation, configuration or hard-wiring integration points to match technical specifications”.

Wearable Technology Image - Labeled for Reuse


I was reminded of this when I recently read a paper from Nipendo titled Cloud Paves The Way To All Inclusive Supplier Collaboration.

It is an interesting paper from a company who, as indicated in my April 23rd, 2014 post What IBM was to mainframes and Coupa was to SaaS, Nipendo is to the P2P cloud, have not only “seen the future”, they also “understand it and are positioned to leverage and influence it to the full benefit of their clients”.

While I will leave it to you to read the paper – and I do strongly recommend that you read it as it is rich with great insights, what resonated with me the most was the fact that we have, in such a relatively short period of time, progressed in our ability to truly collaborate with all of our supply partners – including shippers.  In fact if you take a step back and think about it, the difference in the way we communicate today as compared to when I first entered the field, is as profound as the difference between the telegraph machine and wearable technology.

“Out of 191 supply-chain executives interviewed by the Aberdeen Group, only 14% have the capability to perform online supply chain collaboration with partners”.

The only thing that was more of an eye opener than the technological advancements and resulting capabilities, is that so few organizations have actually taken advantage of the opportunity to reliably and conveniently collaborate online.  It just doesn’t make any sense, especially since we are now doing business in a global marketplace where time is of the essence.

This is another reason why the Nipendo paper is a must read, as it both identifies the challenges as well as provides the direction as to how an organization can move its collaborative capabilities into the 21st century and beyond.

Now that I have started the week with this important share, and hopefully provided you with some needed insight, I have to try to figure out how to set the timer on my Beta recorder.  Hmmmmmm . . . maybe I should take some of my own advice.


Posted in: Commentary