“Competimates” – Competitors Become Collaborators
August 13, 2013 - SCMR Editorial
I learned a new term this week: “competimates.”
This word is commonly used in the aerospace and defense industries to describe companies that compete, but also work together from time to time to provide solutions to customers. This is particularly important in A&D where research and collaboration are required for complete integrated solutions such as a satellite or a submarine.
It seems like “competimates” is a fitting term for supply chains, too.
A company could outsource much or all of its logistics to external 3PLs. But what if a company used the services of two competing 3PLs and asked them to work together to operate one warehouse? One 3PL may have its own trucks and the other may have a superior inventory management system. Together they provide a robust service to their customer. What if they engaged a Customs Broker and made this a Bonded warehouse? What if two suppliers that compete with one another for some products, also supply some products to each other? These competitors become collaborators or “competimates.”
You get the picture.
This kind of expected collaboration among supply chain companies is happening more often. Unique and unexpected alliances between competitors may be required to optimally serve complex supply chain needs. But we know from history, that supply chain collaborations can often be a very bumpy path. Both sides jockey for control and the advantage to get the most work, while they try to build customer loyalty and maximize revenues. Conflicts may remain unresolved and ultimately, the customer is affected.
Here are some best practices in handling competimates and avoiding the bumpy path:
• Make sure all parties clearly understand the overall strategy and goals – don’t leave any party in the dark. It is best if everyone understands the direction you are heading and works towards achieving it.
• Set up clear and meaningful KPIs that will require collaboration between the parties and reflect what you determine are priorities. You get what you measure, and if you are measuring the collaboration and not the individual parts, you will get that collaboration.
• Respect the individual goals of the partners and help them to achieve their goals together with your goals. For example, if your supply chain partners have target profit margins, help them achieve their margins through incentives and performance to your goals.
I think we will continue to see more and more “competimates” in complex global supply chains. We should adopt this very descriptive term.
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