Week 4: Dynamics of Supply Network Configuration and Integration
Concept: The total supply network encompasses not just direct suppliers and customers but extends to the operations of suppliers’ suppliers and customers’ customers, forming a comprehensive network.
Significance: This broader perspective helps businesses understand all the influences that impact their supply chain, from raw material sourcing to final product delivery to the end consumer.
Explanation: This involves cutting out middlemen to streamline operations and reduce costs, allowing customers to interact directly with primary suppliers.
Example: In the travel industry, customers now often book directly with airlines and hotels, bypassing travel agents.
Definition: Simultaneous cooperation and competition among network players.
Dynamic: Businesses within the same network can be collaborators in one context and competitors in another, depending on the strategic needs.
Hub Network vs. Direct Network: These designs describe different approaches to managing connections within the supply network, with hub networks centralizing certain processes or distributions, while direct networks streamline interactions directly between users and providers.
Inclusion of Non-Direct Stakeholders:
Stakeholders who might not have direct connections within the main supply network still interact significantly by complementing or enhancing the value provided to customers.
Triadic Perspective on Supply Networks:
Example: An airline, its passengers, and a baggage handling agent create a triadic network, where each node is interdependent on the others for successful operations.
Details the journey from physical and digital channels where a consumer might interact with a retail system, showing how organizational, channel, and process integrations occur across various customer touchpoints.
Vertical integration involves a firm’s ownership and control over multiple stages of its supply chain, from production to final sales.
Direction of Integration: Upstream (backward integration) involves taking over suppliers, while downstream (forward integration) involves moving towards direct customer interaction.
Extent and Balance: The degree to which integration occurs, and how it is balanced across the supply chain, affects operational control, costs, and efficiencies.
Concept: The total supply network encompasses not just direct suppliers and customers but extends to the operations of suppliers’ suppliers and customers’ customers, forming a comprehensive network.
Significance: This broader perspective helps businesses understand all the influences that impact their supply chain, from raw material sourcing to final product delivery to the end consumer.
Explanation: This involves cutting out middlemen to streamline operations and reduce costs, allowing customers to interact directly with primary suppliers.
Example: In the travel industry, customers now often book directly with airlines and hotels, bypassing travel agents.
Definition: Simultaneous cooperation and competition among network players.
Dynamic: Businesses within the same network can be collaborators in one context and competitors in another, depending on the strategic needs.
Hub Network vs. Direct Network: These designs describe different approaches to managing connections within the supply network, with hub networks centralizing certain processes or distributions, while direct networks streamline interactions directly between users and providers.
Inclusion of Non-Direct Stakeholders:
Stakeholders who might not have direct connections within the main supply network still interact significantly by complementing or enhancing the value provided to customers.
Triadic Perspective on Supply Networks:
Example: An airline, its passengers, and a baggage handling agent create a triadic network, where each node is interdependent on the others for successful operations.
Details the journey from physical and digital channels where a consumer might interact with a retail system, showing how organizational, channel, and process integrations occur across various customer touchpoints.
Vertical integration involves a firm’s ownership and control over multiple stages of its supply chain, from production to final sales.
Direction of Integration: Upstream (backward integration) involves taking over suppliers, while downstream (forward integration) involves moving towards direct customer interaction.
Extent and Balance: The degree to which integration occurs, and how it is balanced across the supply chain, affects operational control, costs, and efficiencies.
