• Introduction:
Cooperation and trust among partners within the supply chain requires investments in human and assets in developing the natural processes needed for impacting efficiently customers in the market place. In the early 80, companies act independ looking for vertical supply chain integration. But market globalization, new technologies and new inventory management techniques require sustainable relationships among suppliers and customers (Bechtel & Handfield, 2002).
Companies that want to enhance trust should evaluate the following aspects:
1. Value harmonization among supply chain participants,
2. Investments in human factor, assets and technology,
3. Developing procedures for sharing data and results.
Each company has its core values and strategy. Cooperation as value requires win-win solutions for all participants in the supply chain. Several models can be developed depending on participants’ numbers and power in the supply chain as buyer or seller. Centralized models give one point of connection in the network becoming dictatorial or participant depending on the company governance structure (Slack & Lewis, 2011).
• Mining Sector Cooperation Model:
Natural resources require companies engaged with the government that owns the resources. As an example the Mongolian Government signed agreements with China as well as other countries and companies for developing the Mongolian Coal Mining Sector. As a developing country located in a difficult geographical area, mining coal activities are very costly, requiring close and long relationships with buyers to ensure amortization of the high cost of production. Reason why the Australian Government signed an agreement of 20 million $ for developing sustainability of Mongolia res...
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...iveness. The complexity of cooperation and trust requires companies to develop new employee behaviors for increasing participation in the network's activities with IT support data analysis to ensure that each company receives the financial results needed or success.
References:
AU. (2014) AU Press News [Online]. Available from: http://www.foreignminister.gov.au/releases/Pages/2014/jb_mr_140318a.aspx?ministerid=4 (Accessed 18 04 2014).
Bechtel, C. & Handfield, R.B. (2002) 'The role of trust and relationship structure in improving supply chain responsiveness', Industrial Marketing Management 31, March, pp.367–382.
Chopra, S. & Meindl, P. (2007) Supply chain management: strategy, planning, and operation. 3erd ed. Upper Saddle River, NJ: Pearson/Prentice Hall.
Slack, N. & Lewis, M. (2011) Operations strategy. 3erd ed. Harlow : Financial Times Prentice Hall.
The cooperative game theory comes in picture when more than two players in the supply chain come together and form alliances to harness maxim...
Scott and Westbrook (1991) and New and Payne (1995) describe supply chain management as the chain linking each element of the manufacturing and supply process from raw materials through to the end user, encompassing several organizational boundaries.
Russell, R. S., & Taylor, B. W. (2011). Operations Management: Creating Value Along The Supply Chain. (7th ed.). Hoboken, NJ: John Wiley and Sons, Inc.
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
In a traditional manufacturing company, the supply chain covers the following roles: suppliers, labour, engineering, production, product, quality assurance, inventory, competitors and customers. The last role, that of customers, is different from the rest of the roles within a classic supply chain, meaning that suppliers are oriented upstream, while customers downstream; the labour is situated internally, while customers are external; engineering is done only by qualified engineers; production is protected from customers; products represent the offering that the customers obtain; quality assurance prevents faulty products to get to the customers; inventory can be managed in order to saturate the demand in time; and finally competitors offer customers different choices to satisfy their needs. Taking separately, the customer role in the traditional supply chain often resumes at “selecting, paying for, and using the outputs” and sometimes proving feed-back and promoting a company’s offerings by recommending to others (Sampson and Spring,
Supply chain management is basically refers to the fundamental supply chain analysis of the organization which predominantly describes functionalities from source to the delivery point. In this process of delivery, supply chain management framework divides in four categories: In Planning the products and suppliers evaluated and selected, Sourcing pull the information process including contracting, ordering and expediting, Moving is a physical process from suppliers to end user and Paying is the financial process including payment and performance measurement.
‘Supply chain management integrates supply and demand management within and across companies. It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thir- party service providers, and customers’. (Web: Council for Supply Chain Management Pr...
(1999).Advanced supply chain management: How to build a sustained competitive advantage. San Francisco, CA: Barrett-Koehler Publishers, Inc.
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
Xia, M. & Xia, N. (2008) 'The Complementary Effects of E-Markets on Existing Supplier--Buyer Relationships in a Supply Chain', J.Manage.Inf.Syst., 25 (3), pp.9-64.
Quickly becoming apparent after only a few rounds of play was in the absence of coordinating direction the individual supply chain links immediately focused upon acting in their own best interests much more so than the organization as a whole. Whether the end use customer was satisfied became secondary to avoiding stock outages for the next link in the chain, or their specific “upstream customer”. The real world application of this example is that focus on the end use customer must be consistent and maintained throughout the process up to and including delivery. Undoubtedly internal customers, such as retailers to wholesalers and distributors to production, must be serviced along the way for the transaction to ultimately occur. However, unless an end use customer is involved no profit can be realized by anyone.
As pointed by Parsons A.L (2002), there was increasing dependent on the relationship and customers is demanding to receive high standard of products and services for them to sustain the business in the intense manufacturing environment. Besides, Xu et al. (2008) has highlighted that supplier is developing a long-term relationship with their crucial suppliers to increase the competitiveness and to establish an effective and efficient supply chain. Trend (2005) also mentioned that work closely in partnership with suppliers is the only way to survive in today’s competitive business environment.
In other words, it aims to link all the supply chain agents to jointly cooperate within the firm as a way to maximize productivity in the supply chain and deliver the most benefits to all related parties [2].
Generally, a superior supply Chain is an important and unique source of competitive advantage. Its importance is especially illuminated in Multinational companies such as Toyota. Putting this into consideration, the question that now begs for an answer is whether Toyota’s supply chain is effectively serving the organization. Without a doubt, Toyota ha...
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.