The Realization of Supply Chain Collaboration - Term Paper Example

It has been established that poor management of the supply chain results in a staggering loss of A definition by Cooper et al (1997) is that three or more organizationally distinct handlers of products, where products include physical goods, services, and information, make a supply chain. Due to this multi-organizational nature, 74-. 0supply chain management has emerged as the core strategy of the firm for competitive advantage with a focus on building and maintaining inter-firm relationships.

It has also been noted by Achrol and Kotler (1999) that it is now widely understood that since this has become core strategy, the competitive advantage is now sought not at the level of the individual firms but at the level of the entire supply chains that they work with. A large number of companies realize the route to becoming world-class competitors lies in their ability to establish high levels of trust and cooperation with their suppliers (Buono 1997). Globalization has lent credence to this need more acutely and creating a cooperative relationship has now become a core strategy in supply chain management (Andraski 1998; Stank, Keller, and Daugherty 2001).

Working in far-flung markets, with varied requirements for different manufacturing units; with an increased focus on cost, quality, and flexibility, procurement has become the primary factor as the first step towards competitive advantage. This is easier said than done. Uncertainties beset the practices of managing a supply chain. There are growing expectations of the end-user, changing market dynamics and technological advancements that need to be dealt with in an inter-firm cooperative relationship (Ghosh and John 1999).

Greater uncertainty increases the chances of seeking controls through vertical integration in place of supply chain relationship as this appears more feasible.