Supply chain coordination mechanisms

The first goal of this book is to focus on supply chain architecture by focusing on four specific concepts, i.e., the Four Cs of supply chain man etnent. These four Cs are chain structure and ownership, capacity—its type and location across the supply chain, coordination mechanisms, and competitiveness—the metrics of competition and the competitive pressures faced by the supply chain. Choices made regarding each of these Four Cs generate possible supply chain architectures. 

Several studies have dealt with coordination aspects in recent years. A number of supply chain coordination mechanisms have been proposed by many researchers to manage the supply chain interdependencies these are illustrated in Table 2. 

In this chapter, we explore a modelling paradigm for supply chain coordination using the notion of supply chain intermediary. Our goal is to complement the view offered by the supply chain contracting literature that uses long-term coordination contracts as a primary mechanism to achieve channel efficiency. We propose to look at the problem of supply chain coordination... 

Jin, M. and S. D. Wu. 2001a. Supply chain coordination in electronic markets Auction and contracting mechanisms. Working Paper. Lehigh University, Bethlehem, PA. 

Figure 9.9 The process of chain growth in bound-ion-coordination mechanism for polymerization on a catalyst surface with the growth taking place from a single active site and the monomer being supplied from the liquid phase. Con-secutive propagation steps are represented in (a), (b), and (c). (After Natta, 1955.)...

The increasing use of outsourcing has accelerated the need to coordinate supply chain processes because the organization becomes more dependent on outside contractors suppliers. Consequently, coordination mechanisms must be in place within the organization. Where to place these coordination mechanisms and which team and functions are responsible become critical decisions. 

The eSCM-I procedure uses the SCOR model for purposes of process standardization. This standardization step plays an essential role as a coordination mechanism to manage interdependencies within a supply chain network. 

While an auction typically serves as a price-determination mechanism, Jin and Wu (2001a) show that it also could serve as a coordination mechanism for the supply chain. Analyzing different auction schemes under both complete and asymmetric information assumptions in a two-supplier one-buyer framework, they demonstrate that different forms of auction and market mechanisms change the nature of supplier competition, thus the buyer-supplier interaction. In a wholesale price auction, the buyer announces the quantity Q and the two suppliers bid wholesale prices to maximize expected profits. In a catalog auc-... 

Hall and Potts (2000) study scheduling problems with batch delivery in an arborescent supply chain where a supplier makes deliveries to several manufacturers, who also make deliveries to customers. Various problems from a supplier point of view, from a manufacturer point of view, or from an entire system point of view are considered. Each problem is either proved to be NP-hard or given a polynomial dynamic programming algorithm. They also discuss the possible benefits from coordinated decision making, as well as some mechanisms for achieving it. 

Jin, M. and D. Wu, Supply Chain Contracting in Electronic Markets Incentives and Coordination Mechanisms , working paper, Lehigh University, 2002,... 

To achieve integration coordination mechanisms are needed to manage the flow of information and materials and to take decisions. Examples of coordination mechanisms are standardisation of output, process, or knowledge and skills. More expensive and complex coordination mechanisms to achieve integration in a supply chain are coordination by hierarchy or plan and coordination by the creation of lateral linkages [49, 50]. With respect to relationship stractures as depicted in Fig. 2.5, coordination tends to be more complex and expensive going from left to right. 

Below, we describe some examples of pork supply chains in the EU based on case-study research performed in the EU (EU-FP6-036245-2) project Q-Porkchains. The examples show different integration and coordination mechanisms related to the quality management system(s) adopted by the respective supply chains. More examples can be found elsewhere [51]. 

The examples that have been briefly described above show that different quality management systems exist with different chain governance stmctures and coordination mechanisms. In developing supply chains with suitable structures not only the bi-lateral relationships between actors need to be taken into account, but also the upstream and downstream relationships to prevent suboptimal arrangements [53]. 

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