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1 Introduction
Supply chain management (SCM) evolved from a traditional focus on purchasing and logistics practiced between the mid-1960s and mid-1990s, to a broader, more integrated emphasis on value creation in the new millennium. Leading companies increasingly view supply chain excellence as more than just a source of cost reduction - rather, they see it as a source of competitive advantage, with the potential to drive performance improvement in customer service, profit generation, asset utilization, and cost reduction. Effective collaboration within each entity (cross-functional) and between chain entities (cross-enterprise) is essential to achieve these goals, individually and collectively.
The literature on supply chain collaboration (SCC) is very extensive in both business and academia, but not always on target. For example, few writers focus on the cultural aspects of collaboration, which is a serious oversight. A recent survey conducted by Supply Chain Management Review and Computer Science Corporation ([31] SCMR and CSC, 2004) observes that collaboration is cited as the single most pressing issue; but how to achieve it is not well understood. The survey showed that 44 percent of the organizations in the sample have functions specifically for supplier and customer collaboration. However, only about 35 percent of the collaboration initiatives turned out to be even moderately successful. Why is that? Perhaps, it is because not all participants in every supply chain have embedded collaborative values. You cannot collaborate with a party that lacks a genuine desire to collaborate.
Indeed, our collective field experiences and literature reviews suggest that genuine collaboration is far more difficult to achieve than simply talking about it as many companies do. This is because:
- Time span - while everybody speaks of network integration, most companies have difficulty "aligning" their internal processes with customers and suppliers. Relationship building takes more time than writing an article or a business prospectus.
- IT infrastructure - lack of connectivity, a common platform for data communication and information exchange.
- Trust - an unwillingness to share core information due to confidentiality or lack of trust; this is a cultural factor, one of many in play.
- Organization design - the "Functional" silos in organizations will usually overpower the "Account Management" roles designed to foster collaboration between parties.
- Competition - the Executive fears that...