COLLABORATIVE SUPPLY CHAIN MANAGEMENT

Collaborative Supply Chain Management

Executive Summary

The study focuses on the relationships between the supply chain partners, and enablers and barriers for effective application of supply chain management theories of collaboration to business problems. The supply chain management collaboration refers to technology partnerships etc. in which reuse or recycling relationships and supplier evaluation can also be used to manage supplier chains for environmental quality. Collaborative supply chain theories relates to business relationships that consist of a “principal” and an “agent” who engaged in cooperative behaviour, but have differed goals and differing attitudes toward risk. The mechanism for controlling the relationship is the contract between the principal and the agent and, depending on the situation; the contract will be behaviour based or outcome-based. The heart of principal-agent theory is the trade-off between the cost of measuring behaviour and the cost of measuring outcomes and transferring risk to the agent.

Table of Contents

Introduction3

Objective4

Literature Review4

Collaborative Management of Supply Chains6

Sustainable Production Efforts through the Supply Chain Collaboration9

Logistics Management9

Facility Construction10

Product End-of-Use Options10

Collaboration Improves Outlook and Inventory Management11

Collaboration in the supply chain improves service and reduces costs11

The forecast demand and partial information12

The delivery times and order consolidation12

Fluctuations in prices and promotions13

Inflate the order in response to the risk of shortages13

Collaborative Approach to Business Problems14

The Trade Marketing in Supply Chain Collaboration15

The Notion of Partnership16

Collaborative SCM strategies18

Requirements to describe organisation forms and collaborative SCM strategies19

Practical example from industry20

The Hunter Valley Coal Chain21

Supply Chain Management Theories of Collaboration24

Conclusions25

Collaborative Supply Chain Management

Introduction

The study focuses on the relationships between the supply chain partners, and enablers and barriers for effective application of supply chain management theories of collaboration to business problems. The supply chain management collaboration refers to technology partnerships etc. in which reuse or recycling relationships and supplier evaluation can also be used to manage supplier chains for environmental quality. Collaborative supply chain management is a term applied to a management philosophy and to the practices involved in implementing a SCM philosophy, although it can also be used to describe management processes that are not necessarily rooted in a guiding philosophy. As a management philosophy, SCM collaboration is a systems approach that involves assembling a team of upstream (suppliers) and downstream (distributors and end users) partners with a common goal of satisfying a particular customer value or set of values. A collaborative supply chain, considered as a system that can also be described as a distributed network or channel through which information, materials, labour, equipment, and currency flow. Though supply chains themselves are not new, four major developments forced thinking about them differently than in the past. The first motivating force came from the communications technology advances that forever changed the span of the marketplace for both the producer and the consumer. The second was the trend toward outsourcing in general, and global outsourcing in particular, which the information age enabled. The third was the increasing importance of timeliness in the marketplace. The fourth was the increasing emphasis placed on quality in all aspects of production and ...