Effective Supplier Collaboration Is Critical

McKinsey, the global consulting firm, has done research and writing on supply chain collaboration. In some industries, suppliers account for over 80 percent of the value of the products that are produced. In one McKinsey survey of more than 100 large organizations in multiple sectors, companies that regularly collaborated with suppliers demonstrated higher growth, lower operating costs, and greater profitability than their industry peers. Companies with close collaboration with suppliers outperform their peers. Depending on the industry, companies can see cost savings of 5 to 10% and revenue gains of 7 to 10%.

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