Chapter 11: Collaboration in E-Supply Networks

11.1 Introduction

Markets once favored competitors that could successfully integrate massive horizontal or vertical asset bases to create economies of scale. The current global environment, marked by increased demand, decreased customer loyalty, shorter product life-cycles, and mass product customization, forces companies to lower costs while increasing the quality and variety of products and services. The rise of Business-to-Business (B2B) Trading Networks over the Internet enables companies to meet these challenges by extending their value-chains and cooperating with organizations whose complementary capabilities can give the whole business network a competitive edge. The ability to share, integrate and collaborate with other businesses provides an additional differentiation for companies competing with large asset-based competitors. The need to better integrate with customers and suppliers compels businesses to dramatically alter their processes in order to survive. As the cost and latency or friction is removed from B2B transactions, companies will be more willing to consider outsourcing what were once core business processes, thus finding themselves as participants in multi-company business processes. Consequently, many companies are currently disassembling their process infrastructures into independent processes and then reassembling them as parts of an extended supply network via outsourcing and collaborative partnerships, thus concentrating on their core competencies and process capabilities. This kind of partnering might also mean working collaboratively to share production, demand, capacity or product information in order to synchronize business behaviors across a supply network.

Figure 11.1: Collaborative Planning Leverages of Partner Skills

Industrial competition is therefore advancing from being between individual companies,...