Supply Chain Collaboration - Next Steps and Beyond

Abstract

Collaboration in supply chain is looked upon as the need of the hour. It focuses on the coordination and integration of processes between the partners of supply chain. Collaboration has further been extended to explore possibilities of integration between members of parallel supply chains. The extant literature suggests that supply chain collaboration has multiple benefits. It can help organisations acquire market intelligence and achieve economies of scale. The present paper analyses the different types of collaborations on the basis of current practices in the industry. Developing on this, it further elaborates on the areas within supply chain that can be explored for collaboration. The paper later showcases mathematical models for vertical and horizontal collaboration where it can be concluded that collaboration can have positive effects on collective profit of the partners. Horizontal collaboration is only seen from a viewpoint of manufacturing and much is still there to be explored in this field. The paper finally concludes by reiterating the fact that proper contracts must be in place while firms pursue collaboration. The paper also suggests a model on which a collaboration contract can be formulated.

Keywords: Vertical Integration, Horizontal Collaboration, Supply Chain, Contracts, Manufacturing, Logistics

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