Understanding supply chain collaboration in its definition and applicatio
HỘI THẢO KHOA HỌC - QUẢN TRỊ VÀ KINH DOANH (COMB-2014)
UNDERSTANDING SUPPLY CHAIN COLLABORATION IN ITS DEFINITION AND
APPLICATION
Nguyen Thanh Liem, PhD., Phan Minh Phuoc
University of Economics, The University of Danang
ABSTRACT
Supply chain collaboration is a term that has received excessive usage in the business world.
However, with a large knowledge gap holes in collaboration and supply chain, the definition in itself is
rather disarrayed and confusing. The article will attempt to assess the definition of collaborations, its
types, and a list of common supply chain collaboration system types. It aims to be a reference for
interested businesses in participating Supply Chain system and seeking to maximize benefits gained
from Supply Chain collaboration.
1. Collaboration and its misconception
Until now, supply chain models had integrated into almost successful companies and
corporations in the world. To follow suit, developing countries seized this newfound
knowledge to create a boost in their economic development. Researchers and businessmen
rushed to implement the model in their organizations: many studies and R&D activities were
dedicated to improve the efficiency of each new supply chain models. Yet, organizations
began to realize the existing limits of self-efficiencies and improvements existed only within
the confines of their own. Once becoming more popular, these models were under pressure to
become more competitive in order to survive. Organizations again raced to improve their own
supply chain (Holweg et al., 2004).
One of the most talked topics on supply chain improvement, inter-institutional
collaboration resurfaced to the conversations of researchers and business owners. Supply
chain collaboration had attracted attention from various academics and business-driven
researchers for more than 20 years ago. In the mid of 90‘s, such concepts like Vendor
Managed Inventory, Collaborative Forecasting Planning and Replenishment, and Continuous
Replenishment jumpstarted the interests in Supply Chain Collaboration. These concepts were
simple yet they yielded fruitful results to more than a handful of companies across all
industries. However, their mainstream implementation were the opposite: poor results and
failed experimentations. Why? As the authors hypothesized, one of the main contributors in
this failure was the misconception of collaborative practices and the misunderstanding of
what collaboration truly was (Thomson, 2007).
Although the literature concerning the definition of collaboration was multitude in
number, it comes with a large dispersion in theoretical approaches to the definition. The
growing interest in collaboration involved many researchers from a wide range of disciplines.
Often being isolated from other disciplines, researchers tended to come up with a definition of
collaboration for their own groups. The lack of a unified definition lead to difficulties in
identifying the progress of research in collaboration, lost among various variations of what
wrongly assumed to be collaboration (Thomson, 2007). Thus, this sheer number of cumulated
definitions further confused several interested parties, especially business owners and
stakeholders who were not particularly fluent in scholarly language.
Stakeholders from the practical aspects such as the governments, boards of directors,
investors, and other forms of investors also partook in the trending of collaboration. This
created a new wave of pressure unto organizations, requiring them to create and showcase
their abilities to collaborate with each other. The common assumption was that collaboration
was the best way to effectively allocate scarce resources while building and strengthening ties
151
TRƯỜNG ĐẠI HỌC KINH TẾ - ĐẠI HỌC ĐÀ NẴNG
with others in a networked community. It thought to be the best way for a single company to
complete policy goals whose complexity went beyond its abilities alone. As researches later
pointed out, practitioners ironically had impeded themselves from their best capacities due to
the lack of coherence in policy goals, accountability standards, and collective actions
(Thomson, 2007). A widespread of blinded usage of the term further hindered the intended
purpose, as the word ―collaboration‖ turned into almost a scapegoat word to attract donors
and meet donors‘ expectations. It became no more than a buzzword as there were no
sufficient unity in how it can be implemented and measured.
2. Collaboration and its classification
To find out what collaboration is, it is easier to take an overall look at the most
common misconception of the three keywords: cooperation, coordination, and collaboration.
A growing body of literature has identified these categories to be the main classification of
interorganizational relationships; however, in mass media, they were used interchangeably
despite the fact that each had a distinct meaning and followed a separate level of formality
and structure (Mattessich et al., 1992; Czajkowski, 2006).
Cooperation
It is the most informal interorganizational relationship. It consists of mostly verbal or
simple written agreements between organizations to synchronize a selected number of actions,
with the sole purpose of improving their own efficiency. It has no common mission, structure
or joint planning. Each cooperating organization remains completely intact in their
independency and authority, with minimal risk involved. (Mattessich et al., 1992)
Coordination
It is more formal than cooperation. A common mission, structure or joint planning
comes to existence, through the recognition of similar individual missions being compatible
while still independent. This existence though is at low level, with reasonable amount of
resources sharing and interdependent communication channels. Each coordinating
organization remains their autonomy and authority, with a slightly higher risk if one party
fails to meet the demands of others. (Mattessich et al., 1992)
Collaboration
It is the most formal interorganizational relationship. It requires organizations to
intensively share their authority and responsibility for joint planning, mission, and compatible
structures to allow a high level of communications. Goals are agreed upon to be unified into a
single unified set of goals. The risk experienced here is also at the highest, since each
organization has to contribute its own resources and reputation. (Mattessich et al., 1992)
3. Collaboration and the need for visibility
Collaboration in Supply Chain comes with the prescribed definition, yet it also has
various forms of its own. However, all forms commonly strive to achieve a single goal: To
create a transparent, visible demand pattern throughout the entire supply chain. The benefits
of having high visibility in supply chain are of no doubts: various success stories of the
implementation of tight integration of suppliers in just-in-time delivery schemes, or notable
failures in supply chain management due to lack of commitment in providing supplies status
and other coordination schemes (Liker and Wu, 2000; Chen et al., 2003).
Recent studies on Supply Chain Collaboration paved way for another way of thinking.
The benefits of a better demand visibility were challenged as there existed proofs indicating
that the benefit of reducing delays and replenishment batches exceeded the benefit of demand
visibility through information sharing. Some claimed information sharing to be irrelevant, as
152
HỘI THẢO KHOA HỌC - QUẢN TRỊ VÀ KINH DOANH (COMB-2014)
the order history made by the suppliers were readily matched with the information made by
the retailer even without sharing information between those two, as it stayed consistent and
could be computed through common stochastic properties of product demand (Cachon and
Fisher, 2000; Raghunathan, 2001).
However, a rebuke can be stated as these studies were mainly made through simulation
models, which are still hindered by gap holes of knowledge in understanding benefits from
external collaboration and capacity utilization improvement from demand visibility. In the
real world, where the overwhelming majority of firms has little vision and concentrates on the
short term gains while in collaboration, the interest pool is stretched to a point where
commitment to the supply chain collaboration and information sharing has a hard time to exist
among firms (Lapide, 2001). The complexity of the business world would also hinder
information sharing process. Through researches, it is known that large manufacturers
typically do not use information gained through collaboration to improve their daily
operations in the long run (Stank et al., 2001). Such information only has a purpose to be used
in process development or performance measurement studies; thus benefits of information
sharing do not reach to their fullest, making the collaboration a haphazard application of its
theoretical counterpart (Holweg et al., 2004).
For external supply chain collaboration, the transparency of information flow is the
main objective. Common problems such as bullwhip effect, where unpredictable demand
patterns cause a distortion of inventory planning, lead to poor service levels, high inventories
and frequent stock-outs. Demand visibility seems to be the obvious answer (Holweg et al.,
2004). However, with the current traditional setup of internal supply chains, their production
and inventory control system are more than often not compatible with the information
provided from the outside sources, nor with the sheer amount of stocks at hand for a supplier.
Thus it poses a problem on which method is best for the integration between external
collaboration with internal production and inventory processes. The collaboration will lose its
significance among supply chain participants, reducing it back to coordination or cooperation
level of partnership.
4. Collaboration and its supply chain system configurations
Classification of concepts for collaboration can be divided into different configurations
based on the levels of collaboration types. To put it simply, the collaboration types are at its
core planning and inventory control. These dimensions are chosen for their popularity in
current supply chain collaboration. Factors such as product characteristics have the same
effect on the system overall. For each existence of collaboration types, there are total of four
configurations of supply chain collaboration: Traditional Supply Chain, Information
Exchange, Vendor Managed Replenishment, and Synchronized Supply (Figure 1). A brief
analysis of each configuration will be followed suit. (Figure 2) (Holweg et al., 2004)
Information
Exchange
Synchronized
Supply
Vendor-
Managed
Replenishment
Traditional
Supply Chain
153
TRƯỜNG ĐẠI HỌC KINH TẾ - ĐẠI HỌC ĐÀ NẴNG
No
Yes
Inventory Collaboration
Figure 1. Basic Supply Chain configurations for collaboration (Holweg et al., 2004)
Type
Definition
At each
Brief analysis
Why does it still exist?
The supplier‘s only
Suppliers can be
Traditional
level of the source of information is limited due to geographical
supply chain, from the issuer of orders. factors. The placement of
there is no They often cannot estimate its factories may bring a
Supply Chain
consideration
correctly the demand trend, diverse group of local
of other tiers‘ causing them to over- customers, thus can create
situation when produce since they have to conflicts of interests among
it
issues be cautious about running customers
as
their
production
orders
restock.
low in their produced collaborators in whether to
and goods.
This leads to an
increasing variance in
invest in reconstruction of
supply chain collaboration.
Some customers also
orders as demand moves up like to take advantage of
the chain, causing major inventory overflow for
losses in inventory and total discounted prices, thus
profit.
prefer the old system.
Retailer
An
improvement
However,
Information
Exchange
and suppliers compared to the traditional collaboration only stops
still order supply chain collaboration. here. Information sharing is
independently Complete visibility of much easier than providing
while
exchanging
demand trends is not detailed forecasting and
possible, but uncertainty in planning process to other
their demand forecasting
information considerably.
is
lessen collaborators
at
a
moment‘s notice.
and
plans
action
for
Since this is strictly
information sharing about multiple customers with
Suppliers also have
capacity and
long-term
planning
demands,
each their own plans at once,
collaborators creates their thus it will become too
own
forecasts,
thus complex
once
is
an
demand
created.
overcapacity or inventory aggregated
shortage can still occur if forecast
their strategic plans clash Suppliers simply choose
with each other.
the easy way to just sharing
information instead of
strategies.
Supplier
In
this
will
responsible for replenishment orders to the manage the inventory
settings,
Through
this
Vendor
Managed
Replenishment
s
are customers
place settings, suppliers can
creating
supplier, while the supplier replenishment cycle so
154
HỘI THẢO KHOA HỌC - QUẢN TRỊ VÀ KINH DOANH (COMB-2014)
replenishment will manage the inventory they can speed up the
orders,
maintaining
inventories
for them. Through this, the supply chain. This setting
supplier will have full is common with supply
visibility of the customer‘s chains
products.
It is increasingly
dynamics of this type is not difficult to have
an improvement from the management system that
of
short-life
and
service stock.
levels for the
retailers.
However,
the
a
traditional one, as the same satisfies
all
of
the
amount and type of supplier‘s
customers.
decisions are still being Coupled with the lack of
taken.
inventory
Customer‘s knowledge on how to use
and sales customer data, many
information are available, suppliers find it easier to
but are not put into a good just replenish one by one.
use.
The
A
combination of
Its appearance is
Synchronized
Supply
supplier takes both information exchange rare. The reasons why it
charge of the and adjustment to planning does not appear much as it
customer‘s
inventory
replenishment drives
decision structure. The should be are that the
demand at the retailer current preference of
the combined managers is to use the type
on
the inventory and production of information exchange to
control process, together improve procedures at
operational
level, and uses with feedback on complete management
this visibility supply chain inventory. Additionally, obstacles that
in planning his Theoretically, all the have significant impacts
own supply leverage in supply chain such
operations tiers will not exist; all dispersion,
levels contain
simultaneous flow
level.
as
geographical
integration
a investment costs
of
demand information and
inventory control strategies.
Figure 2. Brief analysis of supply chain configurations for collaboration (Holweg et al.,
2004)
5. Collaboration and the consideration for its application
It is to be noted that not all Synchronized Supply model is the best answer to create
the most suitable supply chain model in a market. However, once looked over the simplified
list of 4 configurations, a supplier should strive for the synchronized supply system. This
system promises the best opportunity to eliminate the bullwhip effect, maximize inventory
capacity and storage efficiency, better usage of transportation and better risk control on
naturally limited resources, in addition to the benefits typically achieved through standard
supply chain collaboration (Holweg et al., 2004).
However, in some specific cases, such as suppliers with a centralized manufacture
plant and a customer base divided among regional markets will face a greater cost in their
synchronization efforts than their counterparts with local customers and multiple plants. Thus
collaboration is best to stop at Information Exchange system for these types of companies.
155
TRƯỜNG ĐẠI HỌC KINH TẾ - ĐẠI HỌC ĐÀ NẴNG
Vendor-managed replenishment is a preferred system for companies within the compartment
and supplement material industries. Longer product life means easier maintenance for
replenishment cycle. The goals of managers in these types of companies prioritize the
enhanced customer services as a purpose for their supply chain model than self-improving
chain‘s efficiency (Raghunathan, 2001).
The synchronization model seems to mostly create major improvements for large,
multinational companies. However, suppliers of smaller sizes enjoy much more benefits from
their synchronization system. A key benefit is an increase in customer responsiveness, be it
for local or specific customers. Costs of inventory control can be reduced with the help of
advanced technology in logistics operations (Karkkainen, 2003).
Supply chain collaboration is definitely rising trend in business, both in its popularity
and usefulness. Be as common as it may, bullwhip effect is still a dominant problem in all
terms of supply chain collaboration (Thomson, 2007). This article hopes to serve as a guide
for business and interested supply chain partners in understanding different forms of
partnership, as well as a common category of supply chain collaboration. Through this, supply
chain participators can clearly understand more about which type of supply chain
collaboration they really are; thus they can devise a better approach in solving their supply
chain‘s inefficiency through a focus on its visibility.
REFERENCES
[1] Cachon, G. and M. Lariviere. "Contracting to Assure Supply: How to Share Demand Forecasts in
a Supply Chain." Management Science (2001): 629-646.
[2] Czaijowski, Joyce M. "Leading successful interinstitutional collaborations using the collaboration
success measurement model." 2007. Upper Iowa University Document.
[3] Disney, S.M. and D.R. Towill. "Bullwhip Reduction in Supply Chains: The Impact of VMI."
International Journal Of Operations and Production Management (2003): 625-651.
[4] Holmstrom, J., et al. "Collaborative Supply Chain configurations: The implications for supplier
performance in production and inventory control." 8th International Symposium of Logistics.
Seville, Spain, 2003. 455-464.
[5] Holweg, Matthias, et al. "Supply Chain Collaboration: Making Sense of the Stategy Continuum."
European Management Journal (2005): 170-181.
[6] Karkkainen, M. "Increasing efficiency in the supply chain for short shelf life goods using RFID
tagging'." International Journal of Retail & Distribution Management (2003): 529-536.
[7] Liker, J. and Y. -C. Wu. "Japanese Automakers, U.S. Suppliers and Supply-Chain Superiority."
MIT Sloan Management Review (2000): 81-93.
[8] Mattessich, P. W. and B. R. Monsey. Collaboration: What makes it work. St. Paul, MN: Amherst
H. Wilder Foundation, 1992.
[9] Raghunathan, S. "Information Sharing in a Supply Chain: A note on its Value when Demand is
Nonstationary." Management Science (2001): 605-610.
[10] Thomson, Ann Marie, James L. Perry and Theodore K. Miller. "Conceptualizing and Measuring
Collaboration." Journal of Public Administration Research and Theory (2007).
156
6 trang
21800
Free
Bạn đang xem tài liệu "Understanding supply chain collaboration in its definition and applicatio", để tải tài liệu gốc về máy hãy click vào nút Download ở trên
File đính kèm:
- understanding_supply_chain_collaboration_in_its_definition_a.pdf
