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Abstract
Collaborations in supply chains as a business strategy is now getting increasing attention at business leadership level. In most cases, collaboration appears to imply vertical integration on both ends of the supply chain, that is, collaboration with suppliers and dealers/retailers. Although horizontal collaboration (that is, between supply chains) is sometimes mentioned, old business model of competition with peers still holds. Considering the disorganized retail industry in India which is close to Rs 500,000 crores today, researchers feel there is substantial scope for horizontal collaboration during the consolidation phase. They find that there is substantial reduction in system inventory leading to reduced working capital requirement. More importantly, horizontal collaboration also improves fill rates, a result counter-intuitive to the well understood concept of higher inventory needed to improve service levels. They also find that with increasing demand uncertainty, benefits of horizontal collaboration rise significantly. In their opinion, disorganized Indian retail industry has a golden opportunity to analyze and adopt horizontal collaborations.