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TopBackground
Supply chain function is based on three fundamental pillars: integration, collaboration, and coordination. Fawcett and Magnan (2002) indicated that better words to describe integration are cooperation and collaboration. Chen et al. (2009) stated that integration is often equal to coordination and collaboration. Thus, integration, collaboration, and coordination are closely related.
Key Terms in this Chapter
Logistics: A broad range of activities and has many vague descriptions, for example service, business, inventory, functional management, etc.
Coordination: The act of managing interdependencies between activities performed to achieve a goal. The purpose of coordination is to achieve collectively goals that individual actors cannot meet.
Electronic Data Interchange (EDI): The structured transmission of data between organizations by electronic means, which is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention
Supply Chain Management: The integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders.
Bullwhip Effect: An observed phenomenon in forecast-driven distribution channels. It refers to a trend of larger and larger swings in inventory in response to changes in demand, as one looks at firms further back in the supply chain for a product.
Vendor-Managed Inventory (VMI): A family of business models in which the buyer of a product (business) provides certain information to a vendor (supply chain)supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store).
Collaborative Planning, Forecasting and Replenishment (CPFR): A business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand.
Integration: Separate companies or different internal functions of a company coordinate.
Collaboration: The business practice that encourages individual organizations to share information and resources with each other for the benefit of all.
Enterprise Resource Planning (ERP): An integrated software application that integrates internal and external management information across an entire organization—embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc.