Collaborative Processes in esupply Networks

Abstract

This paper, which outlines research in progress, will attempt to provide an overview of collaborative relationships and processes within electronically-connected supply networks. These e-Supply Networks utilize the Internet to facilitate coordination and collaboration among multiple trading partners. We will look into the premises of interorganizational collaboration by delving into the new market landscape, trade exchanges and collaborative communities. Based on the contemporary business developments transformed by the advent of the Internet, we will describe the processes that define collaboration and take place in bilateral and multilateral relationships between partnering firms. We will expose how esupply networks are currently deploying supply chain planning applications that bind firms through information-sharing, interdependent transactions and collaborative processes that take place in Internet-based Marketplaces or Trade Exchanges. In order to establish and facilitate interorganizational collaborative partnerships, a rising number of firms use process reference models that have been developed via cross-industry initiatives. The most noteworthy are: a) Supply Chain Council's SCOR (supply chain operations reference process model); and b) the Voluntary Industry Collaboration's CPFR business model (Collaborative Planning, Forecasting and Replenishment). Both of these models attempt to assist managers in designing supply networks via standard, but highly customizable process descriptions. The SCOR model is more focused on performance improvement, while the CPFR model studies “how” companies can design and deploy their collaborative processes. We will show how the SCOR model is used to classify collaborative processes, and subsequently make a short presentation of the CPFR model. Finally, we will end by setting forward a research agenda that goes beyond the largely descriptive and anecdotal presentation of the advantages of eBusiness from popular literature and press. We believe that companies are facing immense costs and barriers related with their transformation into collaborative communities. Introduction The current global environment, marked by increased demand, decreased customer loyalty, shorter product life-cycles, and mass product customization, forces companies to lower costs while increasing the quality and variety of products and services (see figure 1). In order to be able to meet these challenges, companies are extending their value-chains by cooperating with organizations whose complementary capabilities can give the whole business network a 185 SCM consists of Supply Chain Execution (SCE) and Supply Chain Planning (SCP). Typical processes included in SCE are international trade logistics, warehouse-, transportation-, inventory-, and ordermanagement, while SCP incorporates supply chain network design, demand planning, forecasting, supply planning, production planning, scheduling, and distribution planning. 186 According to Forrester Research, during the past few decades, power has shifted away from manufacturers and many industries (retailers in the Consumer Packaged Goods (CPG) and end-users in Industrial Goods industries). competitive edge. Industrial competition is therefore advancing from being between individual companies, to being between clusters of tightly-knit partnering corporations with the intent of delivering to the consumer the right product at a fitting time-frame and price. So, companies are progressing from the notion of the extended supply chain and supply networks into electronically-connected supply networks that share information, execute transactions and collaborate on plans via Electronic Marketplaces or Trade Exchanges in an environment of constant change. By sharing activities within such trade exchanges and operating as though they were one seamless organization, synchronized to meet consumer demand, such collaborative communities strive to uncover significant cost savings and service enhancements (Tapscott et al. 2000). From Supply Chains to e-Supply Networks The dawn of the digital, networked economy, enables enterprises to transform themselves into adaptable processes networks. Markets once favored competitors that could successfully integrate massive horizontal or vertical asset bases to create economies of scale. But companies have been slowly moving away from this strategy. The rise of Business-toBusiness (B2B) commerce over the Internet is dramatically accelerating the shift (Tapscott et al. 2000). Businesses' ability to integrate more easily and more often with other businesses for collaboration and cooperation will remove many of the traditional advantages of large assetbased competitors. As the cost and latency or friction is removed from B2B transactions, companies will be more willing to consider outsourcing what were once core business processes. Companies find themselves as mere participants in a multicompany business processes. The need to better integrate with customers and suppliers compels businesses to dramatically alter their processes in order to survive. 187 Clusters within networks are mentioned by Hakansson and Snehota, 1995. 188 Ibid. Christopher 1994 189 Supply networks as a development from linear, supply chains were presented by Harland, 1996. 190 Among the most noteworthy proponents of the “digital economy” are Tapscott 1995, and Shapiro and Varian 1998 191 The concept of adaptable process networks was presented by Chisholm, 1998. ENTERPRISE l Global supply chains