The collaboration in the Supply Chain Management system could be compared with Co-creation. Both “systems” are depending on the collaboration with customer, competitors or suppliers. But why collaboration?
Why do we need to collaborate in the supply chain? That’s a question some companies need to ask themselves to get the highest efficiency out of the supply chain management. Organisations have for many years strived to improve the efficiency of their internal supply chain activities e.g. purchasing, manufacturing and logistics (Ellinger, 2002; Fawcett and Magnan, 2002). On a more fundamental level, in respect of internal collaboration, some authors would suggest that very few organisations have achieved internal integration of their activities (Fawcett and Magnan, 2002).
When this is combined with isolated forecasting and planning the organization is facing an uphill battle just to stand still. In the meantime competing supply chains that manage through collaboration to integrate supply and demand, deliver significantly improved performance, and benefit yet further form closer relationship that themselves foster more opportunities for greater improvement.
Collaboration in the supply chain
There are variety of forms of potential supply chain collaboration, which can be divided into two main categories (see Figure 1) both horizontal and vertical. In the article of Mark Barratt ‘Understanding the meaning of collaboration in the supply chain’ (published in 2004) these topics are explained with theoretical explanation and practical examples.