Supply chain hierarchical coordination

If the processes in a supply chain are not coordinated, they impact multiple companies negatively. It may lead to activities being replicated, inconsistent flows, and erroneous decisions. It may take a great deal of effort to manage the cumbersome interactions between companies. For example, HP s supply chain for computer monitor comprised a contract manufacturer (Solectron), who bought the plastic case for the monitor from an injection molder, shown in Fig. 3.7 (Hammer 2001). The molding-material was purchased from a plastics compounder, who acquired the resin (for compounding) from a resin supplier. The supply chain was linear and hierarchical, with the resin supplier upstream, HP downstream, and the rest in-between. 

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