Protean Supply Chains: Ten Dynamics of Supply and Demand Alignment

CHAPTER 9Shared Supply Chains

Building protean supply chains may not always be a solo effort. In some cases, companies may be better served working together. In dealing with rapidly changing market conditions, companies may be better able to jointly fashion a successful group response than to do an individual one. Certainly, working together allows companies to share the costs and the rewards from collaboration.

The idea of supply chain collaboration between trading partners is hardly new. There has been past industry attempts to encourage companies to work together to improve supply chain flows. Supporting collaboration between manufacturers and retailers became a key objective for the group, the Voluntary Interindustry Commerce Solutions (VICS) Association (now part of the standards group GS1). As discussed in a previous chapter, VICS championed a process called Collaborative Planning, Forecasting and Replenishment (CPFR) as a way for retailers and suppliers to work together on resupplying stores. CPFR was intended to lower overall inventories in the channel and to ensure that store shelves were full of the right product for the consumer.

Along with collective action on the part of industry organizations such as VICS, companies have taken steps on their own in the past to lower supply chain costs through sharing resources. Clifford F. Lynch, writing in his March 2012 column in DC Velocity magazine, noted that in the late 1950s, a public warehouse in Huntington, West Virginia, ...