Evaluating the supply chain performance of IT-based inter-enterprise collaboration

Abstract

With the use of IT, the nature of business processes has changed from intra- to cross-enterprise. This has significantly altered enterprise interactions with suppliers and customers. Collaboration is essential for successful supply chain performance. In recent years a variety of initiatives have been adopted by industries. These attempted to create efficiency and effectiveness through integration of the activities and processes. However, enterprises can only gain significant benefits by mass collaboration. Collaborative Planning, Forecasting and Replenishment (CPFR), which result in deeper partnerships, have become an important factor in supply chains. We investigated the performance of CPFR; it possesses formalized guidelines and is a relatively new initiative. By using simulation, we investigated four CPFR alternatives that are used in the adoption of collaboration strategies in industries. Retailers have traditionally played the hub role in supply chains in order to reduce the bullwhip effect, but our simulation confirmed that shifting the retailer (buyer-driven) collaboration to a manufacturer (supplier-driven) approach was a more viable option.