Integration across company boundaries

Supply chains look different from each company s perspective because management of each company sees its firm as the focal company and views membership and network stmcture differently. Thus, the perceived supply chain network stmcture is arbitrary. However, because each firm is a member of the other s supply chain, it is important for management of each firm to understand its interrelated roles and perspectives. This is because the integration and management of business processes across company boundaries wfil be successful only if it makes sense from each company s perspective (Cooper et al. 1997b). 

One reengineering consultant has said that the existence of walls between the functions is the primary reason for his industry. Indeed, consultants derive much of their revenue from improving communications, integrating information flows, or mediating across these man-made boundaries. Chrysler Group, in a case described in Chapter 21, provides an example of how a large company dealt with what the executive at the time refers to as battleship departments. 

In a supply network, a critical issue is how to coordinate the decisions made by multiple companies. The coordination scheme plays an important role in integrating the network, and it requires sharing of information across boundaries. Two of the key determinants of coordination structure are the decision rights and information architecture. 

---