End-to-End Supply Chain Collaboration Best Practices

Historically, supply chains have focused on delivering products and services by one of the two following internal or external approaches:

• Make—doing it yourself or,
• Buy—negotiating support from other parties.

A key factor in the decision to make rather than buy typically revolves around whether the capability is a core competency, meaning that performing the work provides a competitive differentiation. In their classic Harvard Business Review article, C. K. Prahalad and Gary Hamel shared three tests that identify whether an activity is core or not.1First, a core competency provides potential access to a wide variety of markets.

Prahalad and Hamel use the example of an electronics company needing to have a core competency in display systems. Second, a core competency should make a significant contribution to perceived customer benefits of end products.

For example, it is easy to see how a display screen can impact end users’ perceptions of electronic items, such as cell phones. Third, a core competency should be difficult for competitors to imitate. Thus display screens that might have once been difficult to imitate began to be outsourced to suppliers as the technology evolved. This is likely why Apple chose to work with Corning, which had developed competencies in advanced glass technologies like the Gorilla Glass® for newer models of the iPhone™.