Secure Collaboration in Global Supply Chain Management

Daniel Dumke — Mon, 16 Jul 2012 09:54:07 +0000

One of the fundamental problems in supply chain management in general is that of finding the right trade-offs between information sharing and keeping one’s distance towards potential competitors.

Zeng et al. did a literature review to collect some of the current insights on how to solve this problem.

Collaboration in product design and supply chain environment

Figure 1: Collaborative Product Development Process (Zeng et al., 2012)

Figure 1 shows a typical process from problem formulation up to delivery of the finished product. This process can be decomposed into: collaborative product development (CPD), design chain management (DCM) and supply chain management (SCM).

Collaboration conflicts

Several conflicts threaten the viability of the collaboration. These are all related to the information which is interchanged by the stakeholders.

Figure 2 shows the information flow.

Figure 2: Information Flow between Supply Chain Participants (Zeng et al., 2012)

This information can be divided into information to protect and information to share.
Figure 3 lists some of the relevant information.

Figure 3: Information to Protect and Information to Share (Zeng et al., 2012)

Securing collaboration

Figure 4 summarizes the problem analysis and the corresponding conclusions the authors draw.

Figure 4: Problem Analysis and Potential Solutions (Zeng et al., 2012)

The authors suggest and elaborate on four categories to secure collaboration:

Computer security and privacy technologies
Which consists of measures for access control and secure multi-party computation, where computations can be done on multiple datasets without revealing the underlying information. Furthermore privacy-preserving location-based services are summarized here.
Information partitioning
This contains the aspects of document classification and risk management.
Contract management
Partner relationship management
Here the authors include trust management and innovation capability and reverse engineering mitigation.

Last but not least figure 5 summarizes the current state of the art for the above mentioned problems and potential future research directions.

Figure 5: Future Research Directions on Secure Collaboration (Zeng et al., 2012)

Conclusion

The authors take the view of a computer scientist and find technical solutions (like secure multi-party computation) to fight supply chain problems.
One of the first things that came to my mind: “One cannot use technology to solve social problems.”
I do think that those measures should be pursued further in research as well as business. But the first steps have to be done by describing and defining their individual information buckets, by answering the strategic question: What information is core to our business and should be protected and what can be shared?

Reference:

Zeng, Y., Wang, L., Deng, X., Cao, X., & Khundker, N. (2012). Secure collaboration in global design and supply chain environment: Problem analysis and literature review Computers in Industry, 63 (6), 545-556 DOI: 10.1016/j.compind.2012.05.001

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Information Sharing in Supply Chains

Daniel Dumke — Mon, 07 Mar 2011 13:25:00 +0000

Obstacles to Information Sharing

There are many obstacles to information sharing in a supply chain. Confidentiality is probably one of the biggest issues, but there are others not so obvious like antitrust regulations, the timeliness and accuracy of the provided information, differing technologies between the supply chain partners or a mismatch in the alignment of incentives. Therefore trust and cooperation become critical ingredients in a supply chain partnership.

Drivers of Information Sharing

Lee and Whang discuss those obstacles and present some common types of information sharing in their paper of 2000.
In their view supply chain management primarily implies a focus change from the business to the supply chain. Inter-firm communication gains importance. The goal should be to integrate material, information and money as the three supply chain flows. Drivers behind this development are globalization and the more cost effective IT. Nonetheless, information sharing is only an enabler for better coordination and planning of the supply chain.

Types of shared Information

There are several different categories of information shared between companies.
Inventory Level
Why:

Echelon-based inventory control is optimal under certain assumptions
A variation of the order-up-to policy based on the echelon inventory level would achieve near-optimum
Production rule will adjust the production rate at a stage according to the inventory levels at the downstream stages

Forms:

Continuos replenishment programs
Vendor managed inventory

Problem:

Information validity can be a huge problem

Sales Data
Why:

Orders from downstream serve as a critical source of information about future business
The variance of orders is often larger than the variance of sales
Mitigation of the Bullwhip effect. By having sales data, manufacturers would be in a much better position to differentiate real demands and the so-called “phantom” demands.

Order Status for Tracking/Tracing
Sales Forecast
Why:

Elimination of the Bullwhip effect and the associated inefficiencies.

Production/Delivery Schedule
Why:

Information about (raw) material availability helps the buyer to expand the planning horizon of his own production schedule
For the supplier knowledge about the manufacturers schedule can help to ensure reliable resupply

Other Information Sharing
Sharing of performance metrics or capacity can help to identify bottlenecks in the supply chain and improve the performance.

Models of Information Sharing

Lee and Whang explain three models of information sharing:
Information Transfer Model
In this model one partner takes the lead in the supply chain, the other partner(s) transfers their information to the other who maintains the database for decision making.
Third Party Model
The 3rd-party model involves a third party whose main function is to collect information and maintain it in a database for the supply chain.
Information Hub Model
The information hub model is similar to the 3rd-party model except that the third party is replaced by a system. In this case the information hub does not have to exist physically, individual functional modules may reside at scattered locations and be called and invoked only as needs arise. Thus, the information hub could exist only as a logical entity.

Conclusion

Lee and Whang show what information can be shared in a supply chain and how it can be accomplished. Nonetheless the obstacles remain and are an ongoing subject of research.

Reference:

Lee, H., & Whang, S. (2000). Information sharing in a supply chain International Journal of Manufacturing Technology and Management, 1 (1) DOI: 10.1504/IJMTM.2000.001329

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