Supply Chains

Best Practices to Harness the Power of Pre-Competitive Collaboration for Sustainable Supply Chains

Article - January 8, 2021

Once, there were “business” issues and “sustainability” issues, often viewed in their own silos. But the false barriers are coming down, with more and more company leaders recognizing that major social and sustainability challenges within their global supply chains directly impact their ability to operate, grow, and thrive in a rapidly changing world.

Many of these problems are systemic and contingent upon factors outside of a single company’s immediate influence or supply chain. These are challenges that cannot be meaningfully solved by one company alone. To attempt to do so would be inefficient and likely ineffective, never moving the needle far or fast enough to generate the needed progress.

What Is Pre-Competitive Collaboration?

Put simply, pre-competitive collaboration involves two or more companies within the same industry, coming together to address a shared problem or pain point that doesn’t impact direct business competition and is often focused on joint social or environmental impacts. These private sector partners might also be joined by community actors such as NGOs, donors or foundations in the target region or value chain. Together, they forge new solutions to overcome shared obstacles—unlocking opportunity for the partners, and the ecosystem they all share. 

Pre-competitive collaboration empowers the private sector to meaningfully address systemic challenges by coordinating sustainability efforts, bringing a wider range of perspectives, resources and expertise to the table, and scaling more impactful solutions.

The Case for Pre-Competitive Collaboration

To accelerate impact on complex sustainability and workforce challenges, forward-thinking companies have abandoned the go-it-alone strategy and are working collaboratively to solve shared problems.

Company partnerships can be between competitors—working in a pre-competitive space—but also between companies that share a supply chain ecosystem (e.g., companies that source from the same regions, farmers, or factories, or that hire from shared labor pools). Here, we focus on company collaboration designed to tackle shared supply chain sustainability challenges, with companies coming together to create more efficient, more effective solutions than any one company could manage alone.

When companies collaborate, they can collectively pool and channel expertise, resources, and direct reach and influence. We’ve been excited to see more and more companies identifying creative ways to partner to tackle key business challenges.

7 Pre-Competitive Collaboration Best Practices for Supply Chain Sustainability

1. Choose the Right Focus for Pre-Competitive Collaboration.

The partnerships that succeed—especially those in the pre-competitive space—pick areas for collaboration where the collective win for everyone is greater than the possible downsides. So, choosing the right area for collaboration is critical—and this starts with collaborative visioning and smart partnership design. Companies can collaborate more openly and effectively when the partnership initiative is designed so that all partners are fully bought in, with each party willing to do what it takes for the collaboration to succeed. Importantly, partners’ goals do not have to be the same; they just need to be complementary. The trick is finding aligned interest to solve a shared root challenge or unlock new opportunity.

Setting a partnership up for success also requires companies to be intentional and transparent about what they can, and cannot, do from the start. Companies navigate these conversations more successfully when they’ve clearly articulated what they stand to gain by partnering, and they’ve used this knowledge to secure internal buy in on the back end.

2. Design Sustainability Initiatives from the Ground Up.

We’ve seen that sustainability strategy and solutions designed in the boardroom do not always map to realities on the ground. The most successful sustainability teams take this into account. Many solutions rely on behavior change and uptake at the farmer or supplier level—but these solutions have trouble getting off the ground if they’re not informed by local dynamics and perspectives. We’re learning that some of the most effective solutions, in areas ranging from sustainable farming to safe labor practices, get created when we can bring a wider range of players—but especially farmers, suppliers, and workers in the first mile—to the table. By engaging key stakeholders on the ground, companies can better understand the challenges and obstacles to implementing new sustainability practices or solutions. Companies can then co-design smarter solutions, informed by those actors whose participation and buy-in they’ll ultimately require. This is a more inclusive, more effective approach to designing sustainability initiatives.

To do this well, companies can benefit from working with local partners—groups like Sohail Inc., JA&A, or FairAgora—with existing community networks and the infrastructure, experience, and local buy-in to solicit unbiased and accurate feedback from farmers, workers, and community members.

3. Make Certification a Collaborative Effort.

Individual companies have traditionally created sustainability standards and used third-party certifications to ensure that their farmers and suppliers meet sustainability and fair labor requirements. Despite heavy investment, many companies also recognize the inherent limitations of a company-by-company, farm-by-farm approach: it is expensive and inefficient, and it typically puts the onus for sustainability on individual small farmers and producers. These farmers struggle to afford the certification process and have limited power to solve or alter systemic challenges, such as watershed issues or the complex dynamics that contribute to harmful labor practices. It can also hide the ways that local factors and context may inhibit sustainability, limiting the potential for more substantive solutions. These challenges have led to new models for broader collaboration up and down the value chain—engaging everyone from buyers to suppliers to farmers to civil society to local government and multilaterals—to shape consistent sustainability standards and co-invest in sustainability improvements and verification.

We are also excited to see newer models exploring a regional or landscape approach to certification—broadening the focus from individual farms and suppliers to measure sustainability factors and trends across a production region. This approach creates new opportunity for companies and other stakeholders to co-invest and collaborate to address the systemic factors that inhibit sustainability or fair labor—going beyond what any one farm or supplier could fix alone. As an example of this approach, Resonance has partnered with Thai Union North America, Monterey Bay Aquarium, and a host of research, industry, and civil society partners to develop and test the Partnership Assurance Model (PAM) to address sustainability challenges in the aquaculture sector. The PAM model connects buyers, governments, NGOs, suppliers, and farmers focused on a specific production region to co-design, implement, and verify sustainability and fair labor improvements in aquaculture production. Partners co-invest to help aquaculture farms in target areas level up their sustainability and labor practices, coordinating and aggregating the efforts of individual farms to elevate sustainability across the target region. Through PAM, partners invest in the supply ecosystem and then work together to measure and certify the cumulative impact of their sustainability efforts.

4. Strategically Share Data with Partners Through an Independent Third-Party.

Today, companies collect huge amounts of supply chain data. But this information can be even more powerful when strategically combined and shared. Companies can benefit from aggregated social and environmental data to spot larger trends, track solutions, and focus efforts for fair labor and supply chain sustainability. Data access can also help companies avoid redundancy in individual investments in supplier audits and monitoring—saving time, money, and resources. That said, while partnerships are becoming the norm, many companies are rightly hesitant to share supply chain data, for various confidentiality and proprietary reasons.

One key to unlocking the power of this data lies with having an independent, trusted third-party who can confidentially collect, analyze, and draw conclusions that will benefit company partners and elevate shared sustainability efforts without risking exposure of companies’ sensitive data. This avoids fragmented efforts with huge expenditure of resources with each company collecting the same data from the same suppliers. Instead, resources can be channeled more productively if data are shared. Further, new tools and technologies are making data collection, aggregation, and analysis easier and more impactful than ever before.

Pre-Competitive Collaboration Best Practices for Supply Chain Sustainability

5. Shift the Mindset on the Role Corporate Sustainability Plays for a Company.

For years, companies channeled a significant amount of investment in social good and sustainability outcomes into philanthropy or corporate social responsibility (CSR) programs. Today, more and more companies recognize how sustainability aligns with core business outcomes and can help safeguard and benefit their bottom line. The most successful sustainability teams have continuously identified new ways to collaborate with other internal teams, for example the procurement unit, to generate buy-in and enhance collaboration on sustainability projects that the team pursues individually or through pre-competitive partnerships.

As a result, we are excited to see sustainability increasingly interwoven with core business functions and playing critical roles to support a company’s long-term success. For its part, COVID-19 has prompted many companies to start thinking about resilience, supplier relationships, and supply chain sustainability in new ways. It’s a tumultuous time—and we’re seeing leading companies reexamining and updating the business case for sustainability.

6. Capitalize on Economies of Scale to Amplify Reach and Social Impact.

Pre-competitive partnerships can help key actors move away from isolated, one-off efforts. Instead, more and more, companies and their partners are coordinating and directing resources toward complementary initiatives that, taken together, amplify impact.

For example, the SAI Platform was launched by Danone, Nestle, and Unilever to accelerate pre-competitive collaboration across the food and beverage industry. Today, it is a network of more than 100 member companies, working together to accelerate widespread adoption of sustainable agricultural practices, globally. By coordinating the investments and efforts of its member companies, the SAI Platform helps companies achieve economies of scale and amplify the impact of individual projects, to advance sustainable agricultural supply chains. In Pakistan, we’re working with SAI Platform members to both (a) strategically combine and coordinate individual company efforts and (b) connect member companies to the existing landscape of relevant donor, foundation, international development bank, and local government initiatives and partners. This lets companies build on existing efforts and bring in additional expertise, resources, and local networks from cross-sector partners to solve shared supply chain challenges.

Another note on economies of scale: Partnering can allow a company to more efficiently invest in initiatives that benefit customers, producers, and stakeholders who fall outside the company’s highest priority markets. This means that by coinvesting, a company can expand its reach as well as its impact.

7. Go Further: Embrace Supply Chain Ecosystem Collaboration.

We just discussed how pre-competitive and cross-sector collaboration can create efficiencies and amplify impact and reach. Here we take the point further: Some complex sustainability challenges simply cannot be effectively addressed without collaboration on a significant scale and with actors from both the private and public sectors at the table. Challenges such as reducing oceans plastics, advancing supply chain transparency, and upskilling the future workforce demand ambitious cross-sector and cross-company collaboration. So, how to go about finding the right partners? Look for the companies, stakeholders’ cooperatives, local civil society and research organizations, local government, and finance institutions with a vested interest in the same supply chain ecosystem. For many of today’s most pressing issues, cross-sector collaboration on this scale is what’s needed to connect the dots and make an impact.

For example, transforming our food system to sustainably feed 10 billion people will require unprecedented innovation and strategic collaboration within and across major global supply chains. Resonance is working with the Platform for Accelerating the Circular Economy (PACE) to develop a Circular Economy Action Agenda for Food, an ambitious attempt to outline and coordinate cross-sector action to reimagine our food system. The global Action Agenda will outline specific actions companies, governments, and civil society can take together to transition to a circular economy for food. The PACE Secretariat will act as a systems integrator—inspiring, connecting, and coordinating efforts to amplify impact. This kind of collaboration goes beyond pre-competitive collaboration; it connects and coordinates action across supply chain ecosystems around a common goal.

Looking Toward the Future of Pre-Competitive Collaboration and Sustainable Supply Chains

We believe that pre-competitive and cross-sector partnerships are important tools for advancing ambitious sustainability goals across global supply chains. By forging these connections and using some of the best practices outlined above, companies will have significant opportunity to collaborate better to accelerate impact.

 

Want to know more? Reach out to Resonance’s Katelin Kennedy, Director of Sustainability, to learn more about how we help companies collaborate to advance supply chain sustainability.

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