Problem:
Using the document for perspective, please answer the below questions.
Since SCM relies on the sharing of data, much of which might be deemed proprietary, how can we have effective SCM if we withhold information? Is it realistic to expect all the members of a given chain to be forthcoming with the needed data?
Case Scenario:
This extended partnering is contrary to the traditional adversarial relationship between customer and supplier. The sharing of cost information, transportation contracts, internal process improvements, etc. become matters of trust. Every member of the chain becomes an open book to all the other members. What had been viewed as proprietary information must now become available to the chain. This can cause some consternation in traditional organizations. If one of your suppliers also ships to a competitor of yours will you feel comfortable allowing this supplier access to your cost data, manufacturing strategies, shipping costs or any other strategic information? If you don't then attempting to manage the supply chain will fail. However, if you do allow the supplier access to this data how do you know it won't be passed on to your competition? Trust is essential as a basis for managing the supply chain. Without trust the effort is one of futility.
Utilizing interconnected data systems and standardized (for the supply chain) software the transmission of information becomes seamless and close to instantaneous. Any change in the end user demand gets transmitted immediately down the entire chain allowing each segment to modify their plans accordingly. Any problems encountered by those in the middle of the chain are sent both up and down so every member of the chain can react accordingly. It's through this constant communication that inventories can be reduced since uncertainty is being addressed.