Using a hybrid (Knowledge Based, GAP analysis and AHP approach) methodology, the Knowledge-Based CSCM (KBCSCM) system was developed to assist in planning and designing a Collaborative Supply Chain Management (CSCM). The KBCSCM system has a capability to identify variables or factors that need to be improved immediately for supply chain collaboration development. The purpose of this paper is to discuss the approach / methodology that used to identify the key components that are need to be improved in developing a CSCM from the supplier and customer perspective. This paper also demonstrates the use of The Gauging Absence of Prerequisites (GAP) analysis and Analytic Hierarchy Process (AHP) technique that are embedded in the KBCSCM system, which is used to support the CSCM development. This paper deals with the perspective of auto parts suppliers and customers in the automotive industry on the ability to work together among suppliers, Original Equipment Manufacturers (OEMs) and customers in supply chain management (SCM). A case study approach has been used to gather data from 150 respondents in 8 different organisations through KBCSCM system. Series of questions have been asked and followed by interview to confirm the answers from respondents. By utilising GAP analysis and AHP technique, management could use the result to design the supply chain collaboration environment. The GAP analysis technique, which embedded in the knowledge-based system, is proposed to analyse the gap between the current and the desirable position (benchmark) for an effective implementation. The proposed framework enables suppliers and customers to identify key factors or issues that have greater improvement priority for supply chain collaboration development.