During the course on Supply Chain Operation Management, we have been studying the impacts of different modern trends, including globalization, partnership, outsourcing, horizontal and vertical integration processes and etc., on supply chain system and got an understanding that due to the processes mentioned, different optimization activities are taking place all around, and entities re-evaluate their business strategy in order to keep up with growing competitiveness, hence to achieve “order winning” (Slack & Lewis, 2008, p.45) factors. To prove the point, I will address Sahay (2003, p.553), who, in an article Understanding trust in supply chain relationships indicates that due to “increased competitiveness” most of the enterprises have redesigned their operation, focusing on “core business” and outsourcing “the sub-processes”. Outsourcing policy has led to an understanding of the necessity of developing and improving the long term relationships.
The development of relationship within supply chain is beneficial in terms of acquiring access to diverse skills, knowledge and technology that an entity is lacking, hence possibility of filling in the gaps in the process of customer order fulfilling (Chopra & Meindl, 2010, p. 498). Entities involved in relationship should cooperate and gain trust of each other, to coordinate joint activities and commit to the responsibilities to be able to achieve optimal outcomes in supply chain. As Ghosh & Fedorowicz (2008, p.456) state, coordination in supply chain help to “manage risk, achieve optimal performance and maximize profitability”, where lack of coordination will possibly lead to higher inventory and transportation costs, longer lead time, “higher levels of loss, wastage and damage” resulting in poor performance and service to end user.
So what should be done to achieve mutually beneficial trust and cooperation?
Simatupang & Sridharan (2008, p.405) have indicated five main factors that help the entities to achieve trust and cooperation in partnership with others. Those include:
Besides the above mentioned factors, Chopra and Meindl (2010, p. 499) have also indicated “Conflict resolution mechanism” which is key element in partnership, allowing the misunderstandings or dissatisfaction by any supply chain partner to be solved on the mutually agreed mechanism, thus providing communication between parties and improving trust.
Coming to the conclusion on DQ question, I would like to stress that above mentioned factors, if implemented properly will foster trust and cooperation among supply chain members, providing optimal supply chain surplus.
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