B2B Integration : A Practical Guide to Collaborative E-commerce

Supply Chain Management (SCM) 417
However, the real picture is far more ugly and intricate than what
it appears to be. A legacy supply chain is crowded and congested
with unnecessary steps and superficial stockpiles. There are a number
of barriers and steps inherent in a legacy supply chain as shown in
Figure 14.6.
Lack of external collaboration
A legacy supply chain has a high degree of demand uncertainty and
variability. The forecast figures in a legacy supply chain are not shared
dynamically by supply chain partners, resulting in each of them having
a buffer stock or unnecessary inventory at multiple steps in various
warehouses.
In addition, it takes a long time for the finished product to cross all
the barriers of the supply chain and ultimately reach the consumer.
Lack of internal collaboration
In a legacy supply chain, the focus is on task specialization and local
optimization of functions rather than performance of an organization as
a whole. The internal departments have their own objectives which may
often conflict.
Various departments in an organization engaged in different activities,
such as planning, purchasing, manufacturing, distributing and marketing
have tended to work independently in the supply chain. All these
departments have different priorities. The result is that there is not a
single, integrated plan for an organization — there are as many plans as
there are departments.
14.4. B2Bi-Enabled Supply Chain
There is an imperative necessity for a mechanism through which different
internal and external departmental functions can be integrated together.
B2Bi allows the creation of a supply chain that involves greater
integration, collaboration and exchange of information with its suppliers
and customers. Such a supply chain is based purely on pull-based supply
networks.