Becoming Smart, Innovative, and Socially Responsible in Supply Chain Collaboration

Becoming Smart, Innovative, and Socially Responsible in Supply Chain Collaboration

Copyright: © 2018 |Pages: 21
DOI: 10.4018/978-1-5225-2255-3.ch459
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Collaboration is one of the key themes defining the competitive advantage of supply chains (SCs). In web-based global business arena witnessing Industry 4.0, collaboration across SC partners has to be smart, innovative and socially responsible to form value-creating networks. After exploring various concepts related with SC collaboration, this chapter proposes a conceptual maturity model for SC collaboration in increasing levels of integrity and collaboration scope. The model is unique in: establishing a standardized conceptual base; providing a systematic, process-oriented holistic view for multi-partner SC maturity; offering precise mapping of SC processes onto stages with full process coverage; extending CPFR model; defining maturity stages for advanced, strategic collaboration types (like collaborative performance and risk management, collaborative systems assurance and development, collaborative innovation); explicitly incorporating smartness, innovation and social responsibility concepts; and treating relatively recent terminology such as “virtual networks” and “coalescence”.
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Collaboration is rapidly emerging as an essential part of doing successful business (British Retail Consortium 2014). It has become the key to effectiveness, agility and competitiveness within the global dynamics of digital economy where competition is no longer between organizations but between supply chains (SCs), (Kim, 2006; Trkman et al., 2010; Akyuz & Gursoy, 2010, Cao & Zang, 2013; Lehoux, D’Mourse & Langevin, 2013). Because of various concerns; including rising resource costs, financial shocks, disruption in SCs, changing consumption patterns, emerging new business models and environmental issues; organisations are forced to manage an ever-changing business context. Such systemic challenges are evidently driven by multiple factors, and they cannot be resolved by any single organisation. Collaboration, two or more organisations working together to address common problems or develop opportunities, has the potential to create an overarching change for long-term sustainability. Hence, enterprises are turning to collaboration more and more to address problems too complex to deal with on their own (British Retail Consortium, 2014).

Collaboration in the context of SC is an amorphous and meta concept that has been interpreted in many different ways by both organizations and individuals. Academic definitions mainly focus on the business-to-business (B2B) internet-based technologies; while practical definitions have a wider scope (Wang, 2006).

Arshinder & Deshmukh (2008) list collaboration definitions in their study as: (a) joint planning, joint product development, mutual exchange of information and integrated information systems, cross coordination on several levels in the companies on the network, long-term cooperation and fair sharing of risks and benefits, (b) two or more independent companies working jointly to plan and execute supply chain operations with greater success than when acting in isolation, (c) a win-win arrangement to provide improved business success for both parties, (d) a strategic response to the challenges that arise from the dependencies.

Obviously, the concept is multi-dimensional, going far beyond simple transactional integrity among systems, and involving strategic-level exchange of information and decision making. It is also well-proven to be directly related with various ideas such as SC cooperation, integrity and visibility. In this context, both coordination and integrity refer to tight process couplings among SC partners. The term integration means the unified control of different processes, putting more emphasis on central control and ownership (Cao & Zang 2011), and collaboration puts more emphasis on governance through relationship.

The related literature provides sound support for the benefits accruing from collaboration; for the positive correlation with SC performance, and critical SC capabilities such as agility and flexibility (Akyuz & Gursoy, 2010; Sanders, 2007; Arshinder & Desmukh, 2008, Cao & Zang 2013, Wiengarten et al. 2013; Kim & Nettesine, 2013, Cao & Zang 2011). When organisations come together, they can combine their resources, knowledge, insights, creativity and collective leverage to create radical change in critical business areas. Undoubtedly, process of learning to collaborate may take time; it may seem complex and unfamiliar and require passion, commitment and investment; but the achievements can be significant (British Retail Consortium 2014).

Key Terms in this Chapter

Maturity Model: Staged model describing different evolutionary levels towards improvement and better capabilities.

Internal Integrity: The degree to which a firm can structure its organisational practices, procedures and behaviours into manageable processes within the enterprise.

Supply: Chain (SC): Complex networked system of organizations, people, technology, activities, information and resources for moving a product or service from suppliers to customers. Includes channel partners, which can be suppliers, intermediaries, third-party service providers and customers, engaging in planning and management of all activities involved in sourcing, procurement, conversion, and all logistics management activities.

Smart Supply Chain: Instrumented, interconnected and intelligent SCs with unprecedented levels of integrity and collaboration across multiple SC partners to generate flawless information flow and decision making.

External Integrity: The degree to which a firm can structure its organisational practices, procedures and behaviours into manageable processes across SC partners.

Collaborative Innovation: Process of managing the interaction and collaboration of multiple partners to deliver new solutions within a business ecosystem.

Collaboration: Ability of two or more partners to engage in joint activities at strategic, tactical and operational levels to plan and execute SC operations towards a win-win agreement with greater success than when acting in isolation.

Enterprise Resources Planning (ERP) System: Integrated management information system towards planning, execution and control of all enterprise resources, including money and human resources.

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