Collaboration Methodologies In Supply Chain Management Commerce Essay


Collaboration is a relationship between supply chain partners developed over a period of time. The method of customer satisfactory requires only good understanding of supply chain between suppliers and its customers. Supply chain management give importance of performing better collaboration between suppliers for the better supply chain. Though SCM faces difficulties such as new customer needs even cost and efficiency .from this there is a need to form collaboration between suppliers who can together provide a much better customer service to their customers.

For better and successful development SCM has to focus on customer needs and wants this type of technique will sure help customer satisfaction. so the ultimate approach of SCM is to meet the customer by supplying the right product at the right place, time and price. Collaboration is a aspect in supply chain to share the joint objective for intelligence of commitment trust and respect skills and knowledge and intellectual agility. It provides benefit the chain members.

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The first step for SCC is to ensure the strategy requires decision to identify the goal among the supply chain collaboration partner. Which help in making decision and responsibilities is the main requirement of the successful collaboration. The decision management is defined as extent to chain members able to arrange critical decision at planning and execution level for their supply chain efficiency. This can be done by face to face meeting and virtual discussion and can be arranged to make certain decision that why in supply chain collaboration members need to co-ordinate critical decisions.

The decision making organisation is not only important for enabling the supply chain member to finish their demand on time and maintain less inventory level. The decision making has significant effect to improve the task effectively in supply chain.

The collaboration process is made to meet the specific needs of each individual company. The other factor such as future requirement and operation that affect a company specific goal are mainly developed in SCC for particular business environment the available technology and their SCC relationship.


Since years organizations trying to make effort to improve efficiency of their SC operation and reduce cost for better effective redistribution of costs and inventory when viewed from a SC with respective. The collaboration will firm for effectively cost reduction and maintain better operations.

For new innovative business concept and collaborative relationship between SC members are needed for the new rules of competitive landscapes. This show that collaboration with SC in an alternative to better anticipating and responding to customer requirement from the experience of partner. it is in the same spirit that working together to meet end customer demand by firms is a better alternative to an approach for customer satisfaction.

Many organizations fail to understand the internal process of their trading. Gaps in understanding internal and extern process are made easy for supply chain improvement.

Collaboration provide a system of organisation not only to understand the partners internal process for setting up of platform such that the outcome of decision making and planning is optimized. This also give opportunity for firms to share and make their decision on relevant information which will sure improve the performance of supply chain. Some of the reasons for better organised collaboration are

Achieve cost reduction

Improve customer services

Gain more resources outside the organisation

Concentrate on challenges

Understand in improve the process

Improve decision making


As the organisation needs basic opportunities for strength their firm with supply chain collaboration for better supply chain collaboration they are mainly two main forms of SCC. Vertical which include collaboration with supplier this is to make vertical collaboration in addition to collaboration at internal level involve upstream and downstream integration with partners. The other is horizontal collaboration which integrated of certain competitors and non-competitor for cost saving (sharing ware house space).

Situating Collaboration: Barrat (2004) Fig 1. Illusttrate the vertical and horizontal component of the collaborative spectrum INTERNAL COLLABORATION

It is a function which allows the integration to function internal in organisation as per this external collaboration should not be done for the internal collaborative process.

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This type of collaboration includes collaboration between marketing and logistics. This will often result in better performance as well as good effectiveness. It also include in sharing common goals, resources, and vision for better functioning of purchasing, manufacturing, logistics, marketing. But also avoid any risk failure internal collaboration has to be linked to external collaboration in term of developing closer relationship integrating with customer and supplier. Internal collaboration is simply the starting point for supply chain. EXTERNAL COLLABORATION

The external collaboration can be successfully only with the internal collaboration and integration for better benefits of external collaboration are very higher potentially. It consists of upstream and downstream initiatives as well as integration of outside organization challenges and competitor’s downstream initiatives are like such as customer relationship management (CRM) collaborative demand planning, and shared distribution. Upstream includes VMI, CRP, supplier planning and production scheduling. Collaboration design and collaboration transportation.


The most important aspect for better functioning of SC is the network. Network is a set of SC for the better flow of goods and services from the manufactures sources to customer. The supply network not only a good source for companies of upstream network of supplies but for downstream network of customer. It not only significant the focus on inter firm collaboration and relationship between two independent companies but also to other members in supply chain network. Supply chain network focuses on all the flow of material services and any associate function. They are many ways to make collaboration in better organisation like mutual benefits, information sharing and more. Information sharing also plays a vital role in supply chain collaboration.


Information tech consists of information resources that shared and used by firm. In information sharing it has both technical and organisation capabilities that share information across the firm. Information sharing allows for the better collaboration between trading partner is real time. The web world offer so many huge possibilities and new methods of organisation between companies and customers. Quick response (QR) and efficient customer response (ECR) are the two outcomes that companies have used for competitive challenges QR made the run of product and flow of information sharing faster and better than before delivering time gets shorter due to reduction of manufacture and shipment time and increased more efficiency in supply chain.


They are few forms of supply chain collaboration for better forecasting

Manufacture /customer collaboration.

Manufacture/supplier collaboration.

Manufacture/customer collaboration: This is mainly focused on demand planning and inventory replenishment. It can be also seen under collaboration planning, forecasting and replenishment (CPFR). This helps in supply demand uncertainty to improve communication and collaboration between supply chain trading partners. Partners need to establish understanding of demand for consumption and agree for better replenishment. The idea about this form of collaboration for better reaction of demand uncertainties

Manufacture/ supplier collaboration: The idea about this collaboration is for better product development. This type of collaboration ensure for raw material made available on time and in right quantity. This helps in improving order fulfillment and increase more capacity. It also helps in manufacture to develop product better and faster. This type of collaboration can be considered for long term relationship we can also include features as EDI, ECR, VMI, and CRP.


They are more types of collaboration in supply chain which can be show below.

1. Vendor management inventory (VMI)

2. Collaborating forecasting planning and replenishment (CPFR)

3. Continuous replenishment (CR)

4. Strategic partnership

5. Impact of collaboration on supply chain


Collaborating forecasting planning and replenishment is a method of application of supply chain in retailing. The main idea is to collaborate between retailer and manufactures. This is main goal of CPFR. A better forecasting model is made to improve collaboration in CPFR and forecasting accuracy. Moreover collaborative planning, forecasting and replenishment is a part of business that combines the excellence of multiple trading partners for the fulfilment of customer demand.

CPFR also one of the important aspects of supply chain initiative like JIT (Just-in Time) ECR (Efficient customer response) and VMI (Vendor management inventory). CPFR can reduce the inventory level across the chain by keeping end-to-end communication. CFPR also maintain the trust between trading partners with the benefit of information sharing are known.

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Collaborative Planning, Forecasting & Replenishment

Fig.2 CPFR techniques for the Information sharing.

According to VICS (Voluntary inter industry commerce standard association) CPFR comprises of four main collaboration activities.

1. Strategy and planning.

2. Demand supply management

3. Execution

4. Analysis.

The whole CFPR is based on the collaboration plan, forecasting and replenishment. CPFR became demand for retailer and manufacture. Which in then make arrangement for replenishment and production for total supply chain. For better CPFR accuracy and collaboration is very important aspect. The accuracy of data for forecasting done through collaborative forecasting process among partners. The main aspect is to reduce discrepancies caused by forecasting model and to improve the accuracy and collaboration caused by discrepancies for better CPFR implementation. As we know the manufacturers and retailers have different forecasting intelligence and ways. So they use different forecasting models and methods. For example the retailer forecasting cycle is for several weeks or more due to various products of sale items. But manufacture will know exact due to their forecasting cycle. With this they may be one week due to fewer products and more advance forecasting model. Here the discrepancy of forecasting results between retailer result between retailer and manufacture because of low forecasting result. For better forecasting between CPFR partners a joint forecasting model must be used. The collaborative forecasting between manufacture and retailers in supply chain requires solid forecasting methods approaches which also avoid unnecessary discrepancies and helps partners in supply chain to focus or core issue. Even simple average forecasting methods is easy way in CPFR process.

The higher forecasting accuracy, then complex forecasting methods can be used. As combination forecasting methods which keeps retailer and manufactures sufficient from accuracy. They are many reasons for keeping retailers and manufactures satisfied from combination forecasting model. First reason is that combination forecasting methods keeps the partners together for better progress and also reduces forecasting discrepancies. This keeps the partners jointly together from which there not gone be any loss second reason is that combination forecasting method can make more advantages from partners in supply chain for better accuracy and also achieve co-ordination between partners in supply chain. Third reason is that it can focus in all kinds of products like functional and seasonal in supply chain.

The from the data of the sale result are obtained and then combines forecasting model from retailer and manufacture. Then the final report is made after the discrepancies correction to forecasting result and can be accepted by CPFR. This type of collaboration forecasting process reduces forecasting discrepancy by removing the factors it occurs. This method is also used to reduce forecasting discrepancies caused by forecasting model difference between retailer and manufacture. IMPLEMENTATION OF CPFR

To get the maximum benefits from CFPR it needs to be have well defined structure

To know what the trading partner needs and identify key aspects consistent with the purpose of collaboration

Maintain the role and responsibilities of each partner in CPFR process

Design a collaborative plan that is consistent with the aim of every partner in supply chain

Develop a scale forecast for the better collaboration forecast and identify key aspects along with the method to address those exceptions

Finally the collaborative plan should accept the rise before.

The purpose behind CPFR or any other collaboration forecasting in supply chain is to focus on any challenges of trading partner to get better benefits.


Continuous replenishment program is a replenishment process of retailer making order for one of the partnership among trading partner. In which the supplier can make replenishment quantities based on information on stock and sale received from the customer. CRP is beneficial across all the industry.

CRP has different techniques to manage their process like which partner has the responsibility for managing of inventory secondly which partners can extent more information sharing. CRP is an efficient process with in the efficient consumer response (ECR). It focuses specially on improving the flow of products in supply chain for both suppliers and end customers. CONTINUOUS REPLENISHMENT IMPLEMENTATION

Continuous replenishment program aims improve product availability and decrease stock level with in the chain. In continuous replenishment process the suppliers play a key role for the customer to ensure the availability of stock in warehouse and at the point of sale. The most beneficial effects for implementation continuous replenishment is the smoothing out of fluctuation in stock level and vagaries of production. It is a key for both suppliers and customers for their benefit

Some the goals for CRP are:

Increase inventory turns.

Reduce inventory levels, reduce cost of complete replenishment chain, and lead time.

Decrease stock outs.

Improve customer services level, product availability, and fast supply.

Boost ware house efficiency.

Enhance your trading partners

Perception of values.