Architectural Model for Supply Chain Orchestration and Management

Architectural Model for Supply Chain Orchestration and Management

Marijn Janssen (Delft University of Technology, The Netherlands)
DOI: 10.4018/978-1-61520-611-7.ch039
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Abstract

In a global economy, organizations are increasingly geographically dispersed, which means that the coordination process becomes increasingly complex and information-intensive. Conducting transactions and carrying out online business requires information sharing and supply chain coordination. An efficient and effective coordination of supply chains becomes increasingly important with competition taking place more and more at the level of supply chains, rather than at the level of individual organizations. Consequently, success in creating and maintaining a competitive advantage depends on the reconfiguration of supply chains. Although organizations participating in a supply chain are becoming increasingly aware of the opportunities and threats of Information and Communication Technology (ICT) when it comes to improving coordination with their supply chain partners, organizations whose core business does not involve ICT and supply chain management often lack the knowledge and experience needed to coordinate of supply chains. In this respect, Supply Chain Coordinators (SCC) and Supply Chain Orchestrators (SCO) play a pivotal role in providing the means to automate and manage the coordination of supply chains (Hagel-III, Durchslag, & Brown, 2002). These specialized organizations can provide the necessary services and support to enable the creation and operation of supply chains.
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Background

In literature, the concept of orchestration is discussed with great frequency, taking on a variety of different forms and names. Examples of central entities that perform coordinating tasks within networks range from ‘supply chain coordinator’ (Marijn Janssen, 2004), ‘virtual value chain orchestration’ (Hinterhuber, 2003) and ‘value chain or business network orchestrator’ (Hagel III, 2002) in the business domain, to ‘process orchestrator’ (Marijn Janssen, Gortmaker, & Wagenaar, 2006) and ‘Network Administrative Organizations’ (NAO) (Milward & Provan, 1995) in the public domain. Dhanaraj and Parkhee (2006) use the term ‘network orchestration’, which they define as “the set of deliberate, purposeful actions undertaken by the hub firm as it seeks to create value (expand the pie) and extract value (gain a larger slice of the pie) from the network”. In essence, orchestration is aimed at connecting to consumers by coordinating the interdependent activities of (semi-)autonomous departments or agencies.

Key Terms in this Chapter

Supply Chain Orchestrator (SCO): The entity responsible for managing and orchestrating the activities needed to create, execute and improve supply chains

Service Oriented Architecture (SOA): An architectural style, in which application functionality is not provided by one large monolithic application, but by services that can be combined to create the required functionality.

Network orchestration: The set of deliberate, purposeful actions undertaken by the SCO firm to create value from the organizations that are part of the network

Middleware: Technology that enables the exchange of information between information systems and that encapsulates implementation details

Supply Chain Management (SCM): The management process involving the planning, implementing and controlling of a portfolio of assets (human, equipment, components, etc.) and relationships (customers, suppliers, staff, etc.) to transform a customer’s product from raw material to finished product as efficiently and effectively as possible.

Supply Chain: The distribution channel of a product, from its sourcing to its delivery to the end-user (also known as the value chain).

Web service orchestration: The process of invoking internal and external web services from a predefined process flow that is executed by an orchestration engine (www.w3c.org).

Web Service: A technology that enables the provisioning of functionality, at an application level or at a business level, by means of a standardized interface in such a way that it is easily invoked via Internet-protocols.

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