The knowledge of coordination for supply chain integration

Increasing competition due to market globalisation, product diversity and technological breakthroughs stimulates independent firms to collaborate in a supply chain that allows them to gain mutual benefits. This requires the collective know-how of the coordination mode, including the ability to synchronise interdependent processes, to integrate information systems and to cope with distributed learning. However, research into coordination has paid little attention to acknowledging different modes of coordination. This study promotes the notion of mutuality and the focus of coordination in order to establish a comprehensive taxonomy of coordination modes. Four different modes of coordination have been identified: logistics synchronisation, information sharing, incentive alignment, and collective learning. The knowledge of coordination is then proposed as an explicit understanding about key drivers of coordination modes that have positive impacts on supply chain performance. This paper also presents a research agenda. Introduction A firm needs to develop effective coordination within and beyond its boundaries in order to maximise the potential for converting competitive advantage into profitability (Dyer and Singh, 1998). Coordinating the rate of order fulfilment to match actual consumption is successful from the customer’s point of view, if it results in satisfying a customer’s delivery date and lowers logistics costs. WalMart, for instance, shares point-of-sales data – including sales and stocking data – with its key suppliers (Simchi-Levi et al., 1999). Tracking daily sales enables the suppliers to differentiate popular from slow-moving items and to respond quickly either to replenish or to discontinue the items in retail stores. Tight coordination between Wal-Mart and its key suppliers dramatically increases product availability and reduces inventory costs. Coordination among independent firms, such as raw-material suppliers, manufacturers, distributors, third-party logistics providers and retailers, is the key to attaining the flexibility necessary to enable them to progressively improve logistics processes in response to rapidly changing market conditions. Poor coordination among the chain members can cause dysfunctional operational performance. Some of the negative consequences of poor coordination include higher inventory costs, longer delivery times, higher transportation costs, higher levels of loss and damage, and lowered customer service (Lee et al., 1997). Since The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/1463-7154.htm The authors wish to thank Dr Majed Al-Mashari, the Editor, and anonymous reviewers for their constructive suggestions that have substantially improved the appearance of this article.