Logistics collaboration and integration happens once two or a lot of autonomous firms operating collectively to set up and execute supply chain operations
Logistics collaboration and integration happens once two or a lot of autonomous firms operating collectively to set up and execute supply chain operations. It will deliver substantial advantages and blessings to its partners. It can called cooperative strategy once or more firms or business units work along make mutual benefits. This could be either vertical collaboration and integration or horizontal collaboration and integration (Simatupang and Sridharan, 2002, Mason et al., 2007). Vertical collaboration is when two or a lot of organisations from totally different levels or stages in supply chain share their responsibilities, resources, and associated performance data to serve comparatively end customers whereas horizontal collaboration is an inter-organizational relationship between two or more firms at identical level or stage within the supply chain so as to permit bigger simple work and cooperation towards achieving a typical common objective.
Through group action and collaborating with partners and customers downstream as a part of Lean strategy for supply chain strategy, one truly open a window into his or her future and even for the past. It’s like having the power to time travel.
Integration of supply chain elements started in the 1970s when Electronic Information Interchange created a business-to-business communications standard, followed in the 1990s by Enterprise Resource Planning systems with common databases. Then came the introduction and growth of the Wed Internet.
The physical integration of supply chain processes can be expedited, to varied degrees, for example, by acceptable written agreement such as joint ventures, strategic alliances and licensing that lay out protocols for resources sharing, performance mensuration and revenue distribution between the supply chain partners.
True supply chain collaboration is more than just integrating information among business functions and partners. Yes, is when firms operating together to boost information sharing, but it is conjointly associate interactive method that leads to joint selections of activities also an interactive process that results in joint decisions and activities and often in multi-company groups from varied disciplines in every organisation.
Furthermore, supply chain collaboration is not easy task to accomplish for several reasons, including a tendency to rely too much on one technology, failure to grasp one and with whom to collaborate, and a propensity for distrust among partners.
Collaborative programs like Quick Response, Economical Consumer Response, Seller or Vendor Managed Inventory and the most up-to-date iterations of Collaborative Planning, Forecasting, and Replenishment, have been around since the late 1980s. All involve obtaining a more accurate downstream image of the supply chain, through exploitation of information such as point-of-sale data, retail store and distribution centre inventory balances and withdrawals, current and future events like promotions, discounts, or advertising.
These forms of solutions through IT scale back the bullwhip impact leading to progressively larger inventory swings in response to changes in client demand. The result of which will be supply chain volatility, inefficiency, and waste.
Through a structured integration and collaboration method supported by ITC, it will be attainable for producers and distributors, in essence, to time travel and see potential causes of future disruptions before they occur at the same time associate initial investment in resources could be needed and opportunities for fewer stock outs on store shelves, up-selling, and cross-selling could also be worthwhile.
Collaboration and Integration brings in facilitates advantages like innovation, resource sharing and access to economies of scale since it’s a strategy that’s more and more being advocated and promoted through IT (Eisenhardt et al, 2000, Fawcett et al., 2008). Collaboration could be a valuable dynamic capability such that more agile companies can then reap the advantage from (Barney, 1991, Helfat and Peteraf, 2003).
However collaboration is commonly seen as being unsuccessful and expensive (Magnan ; Fawcett 2010). Since it need aditional working closely with another organisation can require amendment in social control, thinking and practices to ascertain the worth in operating together. Consequently an organisation will also have internal enablers and inhibitors that impact the driving forces to collaborate (Fawcett, Watson, ; Magnan, 2012).
Logistics collaboration and integration issues and how Information and Communication Technology manages these issues are illustrated below:-