Today’s manufacturing sector is witnessing an exponential increase in third-party collaboration. Industrial companies are increasingly engaging external partners, such as suppliers, contractors, consultants, and freelancers. Collaborating with third parties optimizes production processes, reduces costs, and accelerates innovation.
But what are the challenges? How can successful risk management, coordination, and compliance be achieved? We give you real-life examples and solutions.
Read along!
The challenges of working with third parties
1. Coordination Complexity
The challenge associated with managing diverse partners with different interests, practices, cultures, and objectives in a joint project or process. This complexity can be influenced by various factors, including the number of companies and/or individuals involved, geographic spread, diversity (ways of working, cultures, languages), technical complexity, and changing circumstances.
Example
A chemical company is developing a new, innovative algae-based bioplastic. For this they are working with several partners: a biotech company (grows and processes the algae), some chemical companies (supplies chemical components for production), an engineering firm (designs the plant for bioplastic production), and a logistics company (provides transportation of raw materials and products).
Challenges
Regulatory: compliance with strict laws and regulations.
Technological complexity: integrating biological and chemical processes.
Intellectual property: protecting the intellectual property rights of all partners.
Cultural differences: potentially different practices and cultures among partners.
Unexpected events: fluctuations in raw material availability or technical problems.
Insufficient coordination
Delays in product development.
Unsafe working conditions or environmental damage.
Disputes over intellectual property or contractual agreements.
Additional costs due to delays or legal proceedings.
Solutions
Utilize a unified communication and document management system
Use a platform that centralizes communication and documentation, offering real-time updates, mobile access, and integration with existing systems. Ensure it also supports version control and access management for all project-related documents, from contracts to compliance certificates.
Example
A multinational energy company implemented a cloud-based platform to centralize all documentation and communication around the development of a new type of solar panel. This system offered all partners, including material suppliers, engineering firms and logistics companies, access to real-time updates, design documents and compliance certificates. By using this platform, they were able to reduce development time by 20% and significantly reduce miscommunication.
Example
In the pharmaceutical industry, where a company worked with multiple outside laboratories and manufacturing facilities to develop a new vaccine, standardized templates and checklists were introduced. These templates were for quality control, safety assessments and production testing. The uniformity in processes accelerated the vaccine approval process because all parties involved knew exactly what steps to follow and what documentation was required.
Implement standardized processes
Establish clear checklists and templates for various project types to systematically address every aspect, including safety checks and quality assurance. Leverage dashboard functionalities to visually track compliance and monitor project progress.
Schedule regular project reviews
Organize progress meetings to discuss developments, resolve issues promptly, and share best practices, fostering a positive culture of collaboration.
Example
An international construction project that included multiple contractors and subcontractors from different countries instituted monthly progress meetings where each team shared their updates and discussed challenges.This structured approach not only promoted transparency and joint problem solving but also led to a stronger sense of community and mutual respect among the various teams, resulting in timely completion of the project.
Download the ‘Checklist for Managing Coordination Complexity in Third-Party Collaborations’ to ensure seamless integration and operational excellence in your manufacturing processes.
Example
A technology company working to develop advanced battery technologies for electric vehicles implemented a proactive risk management system. This system used predictive analysis to identify potential supply chain bottlenecks before they became a problem. Through regular reviews and updating mitigation strategies, the company was able to accelerate development and avoid delays.
Integrate a risk management framework
Apply tools for the early identification and assessment of risks associated with third-party collaborations. Keep risk evaluations and mitigation strategies regularly reviewed and updated.
Enhance cultural awareness and communication
Recognize the diversity often present in collaborations and provide access to training resources aimed at boosting cultural awareness and intercultural communication skills among all team members.
A software development project with teams in India, Brazil and Germany introduced a cultural exchange program.This program offered workshops on cross-cultural communication and regular virtual team building activities to bridge cultural differences. This approach improved cooperation and communication among the teams, leading to a more successful product launch with fewer conflicts and misunderstandings.
Talk to us
Onyx One offers a streamlined platform tailored for managing the intricacies of third-party collaborations, reducing coordination complexity through its comprehensive suite of tools for qualification, training, job assignments, and compliance monitoring. This ensures efficient, transparent, and secure partnerships. Schedule a demo to see how Onyx One can transform your contractor management process.
