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In business, collaborative design is the process of setting up an organizational structure where two or more business units work together toward common goals. Internally, two or more departments within a single company will work in close conjunction during a production process. Externally, companies will create relationships with other businesses in the supply and value chain to work collaboratively toward a common goal. This may require contracts that allow the company to exercise options to advance its goods or services in the economic market.
The purpose of collaborative design is to create more value by combining the knowledge and resources of multiple businesses or departments within a single business. For example, data chips and computer software individually do not have much value to most consumers. Because of this, the companies that produce these items create a collaborative design with companies that produce the computer hardware that stores and operates the computer software. By combining their products, the companies create a product that is marketable to consumers. This type of operation is used in multiple industries on a wide variety of products and services.
Collaborative design is typically a more decentralized organizational environment in business. Rather than attempting to control all aspects of a business activity or process, companies will spread around some responsibility to multiple groups. Large organizations and publicly held companies often use this design internally due to the size of their operations. For example, using teams to accomplish business tasks and activities is a form of collaborative design. When producing a new widget, companies may select individuals from various departments, such as accounting, marketing, production, and procurement. Each individual will bring particular knowledge from the company’s operations processes in order to produce the best new widget possible under the company’s constraints.
Externally, the supply and value chain is the most common target for collaborative design. This chain involves multiple companies that move a manufacturer’s product into retail stores so consumers can purchase the products. While a manufacturer may produce the best widget in the market, it means nothing if it cannot sell the product in the open market. Using a collaborative design, the manufacturer has a flexible environment where it produces widgets continuously, and its distributors and warehouses move these products throughout the market in order to reach consumers. This design also works for international economic markets. Domestic companies can find willing partners internationally to help the domestic company saturate this market with its goods and services.