Interoperability in the service of coordination: expanding practical choices for supply chain integration

Information and inventory are alternate approaches to managing uncertainty and coordination among trading partners. Application of these approaches is carried out through business processes that mediate customer/supplier relationships. These business processes vary on a continuum from tight coordination, e.g. vendor managed inventory, to loose coordination, spot-buy auctions. The value of electronic business is that it lowers the cost of implementing these business processes, and thereby expands the range of choices available to trading partners. Ideally, dyadic trading partner relationship management should be extended to whole-system supply chain coordination. Given business realities, however, supply chain change will be limited to better multiple, one-to-one relationships. A powerful mechanism for improving these relationships is the ability to inform local choice with knowledge about system-wide behaviour. To achieve this improvement, collective action is needed to develop standards in support of data interoperability. This work was done under Contract #50SBN7C1249, awarded to the Research Triangle Institute by the National Institute of Standards and Technology.