To Trust or Not to Trust: What to Share with Trading Partners

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, as shown in table 1 below. Not everyone is trustworthy.

Before the virtualization of the enterprise and the globalization of the supply chain, it was not so hard. The boundaries of your "domain of trust" aligned pretty clearly with the boundaries of the old vertically integrated enterprise. You just had to keep all that confidential information safe inside your company and you were fine.

Figure 1. Expanding Domain of Trust

No longer. The "domain of trust" now extends deep into the supply chain. We are so interconnected. Everything is networked. More to the point, we've outsourced so much that you MUST share confidential information with your trading partners. If someone else is designing major components of your product, someone else is doing your manufacturing, someone else is servicing your products at your customers' sites, and someone else is running your call centers, then by default you're sharing confidential customer information, product designs and IP, production information, etc. And all the competitive pressures to reduce cycle times, nventory levels, improve service, and innovate products faster are pushing companies to integrate more tightly and share more information, not less. No longer can you afford the sloppiness inherent in keeping your trading partners in the dark.