Costs and Benefits in Supply Chain Collaboration

Recent advances in supply chain management information systems (SCM IS) have enabled firms to more fully collaborate with their supply chain partners — driving out costs while increasing responsiveness to market demands. This chapter examines various types of SCM IS — from traditional EDI systems to more recent Web-services-based e-business applications. It argues that the approach best suited for an organization depends in part on the degree of integration between the partners, the complexity of the business processes, and the number of partners involved. A model is presented for analyzing the costs and benefits that can be expected from each type of SCM IS. The model enables researchers and practitioners to better understand the differences among SCM IS and thus can help reduce the risks of implementing these valuable yet complex information systems.