I recently asked a question to a senior supply chain executive:
"When should you trust your trading partners and when should you withhold information from them?"

His answer:
"Never and Never."

His answer was only partly tongue-in-cheek. It highlights a dilemma we all face. When important information is withheld, it leads to enormous inefficiencies or even disasters in the supply chain. Trust is needed to streamline decision making and interactions in the supply chain. But, in spite of what "Kumbaya Collaborationists" preach, there are very real and serious risks with sharing information.

Global strategic sourcing evolved as a more sophisticated approach to selecting and managing the supply base and the procurement of direct materials. In strategic sourcing, the relationships are longer-term and there is a drive for continual improvement along many dimensions. Most companies that have adopted strategic sourcing practices have developed in-depth supplier scorecards for tracking performance and driving improvements. However, tools and methodologies for measuring the true total cost of supply have lagged behind. An ideal approach goes beyond supplier performance ratings to accurately calculating the effect of the supplier's performance on all aspects of the total cost.

The past two decades have witnessed dramatic improvements to supply chain performance through lean manufacturing, just-in-time (JIT) inventory, ever-increasing velocity, extreme outsourcing, and related transformations. In the ten years from 1992 to 2002, the ratio of inventories to shipments in the US fell from 1.65 to 1.35. These are enormous numbers in the context of our multi-trillion dollar economy. At the same time, the complexity and length of supply chains have increased due to ever-greater out-sourcing and globalization. Today the material is acquired and integral processes are performed by a network of many dozens of "virtually integrated" firms, each master of its own specialty. We are getting more spread out, not just geographically, but also organizationally.