To combat sourcing risk, industry groups evaluate 37 material supply chains
- Material Change, a new report commissioned by a coalition of automaker and supplier associations, evaluates 37 different commodities on a variety of risk categories to enable comparisons across materials and industries.
- The report creates a heatmap of various minerals' association with environmental, social and governance "issues" that could be problematic for companies. It finds, for example, Tantalum is a high risk mineral on nearly all categories but is more a concern for electronics supply chains than automotive ones.
- "One of the biggest obstacles to setting and implementing strategies for responsible sourcing is getting access to reliable current data and analysis on the environmental and social dimensions of material production and processing," The Dragonfly Initiative wrote in its announcement of the report.
When competitors and prime suppliers acknowledge their symbiotic relationship, this typically leads to synergies and relationships that would have gone begging except for cross industry collaboration.
I’ve found over the years that most competitors in a market not only know each other, but also often maintain business and social relationships. There are few secrets in business, and while confidentiality and intellectual property issues need to be addressed, there are many opportunities for finding common ground. Company owners who compete with each other in business often compete with each other on the golf course as well.
Just look at most industry and trade associations. The halls at annual conferences are filled with allied companies, competitors, key suppliers and even some customers. The educational and social aspect of these meetings drives horizontal collaboration and vertical industry development. This is a good thing. Companies can compete, collaborate and coexist. It makes the industry vertical stronger in a "rising tide lifts all boats" kind of way.
I was a participant in a regional semiconductor industry association that focused on quality and operational improvements of suppliers to large merchant chip manufacturers.
Geography and circumstances caused a large portion of the capital equipment supply chain to be located within 50 miles of each other, today in what we call an industry cluster. This industry association hired an executive director who coordinated meetings, training, educational and social events. We developed relationships and shared best practices and frustrations. We all became better suppliers and better companies … and good friends. Ultimately, our common customers were the benefactors.
As supply chains become increasingly intricate and business issues such as sustainability, compliance and risk grow in importance, cross industry collaboration must follow. Those supply chain managers who attempt to go it alone risk having their companies being marginalized out of step with changing industry trends. There is strength in numbers.