You are not the only company capable to create value for your clients. For making valuable products, for performing high standard services, one company is no longer enough in this new informational era, in this new needs era. Better business performing means now to satisfy more complex needs quicker than ever. Could one company face this challenge alone? Is there another way? Collaboration may be the answer. Maybe the most well-known term when it comes to collaboration between companies is Supply Chain. Why Supply Chain, why Supply Chain Management (SCM)? This article presents the answers to these questions, but also presents different approaches regarding SCM: the logistics approach regarding supply chain management, the strategic approach, the new entrepreneurial approach, supply chain as a win-win game. New paradigms regarding collaboration appeared regarding business collaboration: Adaptive Business Network (ABN). Do these new concepts imply the dead of SCM? Or are them only a new wave in SCM terminology and business orientation? Our conclusion is that these new approach is a normal change in business: businesses are made by people and people don’t like to be conducted (managed). The old-fashioned SCM was based on a coordinator versus several obedients relation. It is absolutely normal to dream at freedom and to be not very efficient while you have to play after somebody else rules. ABN is in the other side of human relations and also business relations – it insists on partnering. Everybody is a part of a chain which has as its main goal customer satisfaction, has the right to make proposals, to negotiate, and to be a winner. Of course, ABN appearance does not involve SCM disappearance, but change in how some chains are managed, in how some chains function. We shall see for the future if an organization with several brains is more successful.Supply Chain Management, Adaptive Business Network, Collaboration

Crisan Emil

Ilies Liviu

English

Research Papers in Economics

316 
“SUPPLY CHAIN MANAGEMENT OR ADAPTIVE BUSINESS 
NETWORK? – COORDINATION VERSUS COLLABORATION” 
Ilie￿ Liviu 
Babe￿  Bolyai  University,  Faculty  of  Economics  and  Business  Administration,  58-60  Teodor  Mihali 
Street, Cluj-Napoca, Romania, liviu.ilies@econ.ubbcluj.ro, 0264-41.86.52/3/4/5 
Cri￿an Emil  
Babe￿  Bolyai  University,  Faculty  of  Economics  and  Business  Administration,  58-60  Teodor  Mihali 
Street, Cluj-Napoca, Romania, emil.crisan@econ.ubbcluj.ro, 0264-41.86.52/3/4/5 
 
Abstract: You are not the only company capable to create value for your clients. For making valuable 
products,  for  performing  high  standard  services,  one  company  is  no  longer  enough  in  this  new 
informational era, in this new needs era. Better business performing means now to satisfy more complex 
needs quicker than ever. Could one company face this challenge alone? Is there another way? 
Collaboration  may  be  the  answer.  Maybe  the  most  well-known  term  when  it  comes  to  collaboration 
between companies is Supply Chain. 
Why Supply Chain, why Supply Chain Management (SCM)?  
This article presents the answers to these questions, but also presents different approaches regarding 
SCM:  the  logistics  approach  regarding  supply  chain  management,  the  strategic  approach,  the  new 
entrepreneurial  approach,  supply  chain  as  a  win-win  game.  New  paradigms  regarding  collaboration 
appeared regarding business collaboration: Adaptive Business Network (ABN). Do these new concepts 
imply the dead of SCM? Or are them only a new wave in SCM terminology and business orientation? 
Our conclusion is that these new approach is a normal change in business: businesses are made by people 
and people don’t like to be conducted (managed). The old-fashioned SCM was based on a coordinator 
versus several obedients relation. It is absolutely normal to dream at freedom and to be not very efficient 
while you have to play after somebody else rules.ABN is in the other side of human relations and also 
business relations – it insists on partnering. Everybody is a part of a chain which has as its main goal 
customer satisfaction, has the right to make proposals, to negotiate, and to be a winner. 
Of course, ABN appearance does not involve SCM disappearance, but change in how some chains are 
managed, in how some chains function. We shall see for the future if an organization with several brains is 
more successful.  
Keywords: Supply Chain Management, Adaptive Business Network, Collaboration 
Introduction 
The goal of this article is to bring these new concepts into the light, making a short comparison with SCM. 
The first part of this paper contains details regarding SCM, SCM well-known paradigms, SCM less known 
paradigms. 
The second part is a presentation for a new business concept: Adaptive Business Network (ABN), making 
connections with the old paradigm, SCM. 
Supply Chain Management  
Supply Chain Management definitions and paradigms 
The  Council  of  Supply  Chain  Management  Professionals  (CSCMP)  is  the  most  well-known 
organization  regarding  Supply  Chain  Management.  CSCMP  was  originally  founded  as  the  National 
Council  of  Physical  Distribution  Management  (NCPDM)  in  January  1963.  In  1985,  recognizing  the 
growing  field of logistics, the association's  focus broadened as it changed its  name to the  Council of 317 
Logistics Management (CLM). It stayed that way until 2004 when CLM's Executive Committee voted to 
become CSCMP, effective in 2005
48.  
CSCMP’s definition for Supply Chain Management is the next one: Supply chain management 
encompasses  the  planning  and  management  of  all  activities  involved  in  sourcing  and  procurement, 
conversion,  and  all  logistics  management  activities.  Importantly,  it  also  includes  coordination  and 
collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, 
and customers. In essence, supply chain management integrates supply and demand management within 
and across companies.  
Bowersox, Closs and Cooper’s definition: Supply chain (sometimes called the value chain or demand 
chain)  management  consists  of  firms  collaborating  to  leverage  strategic  positioning  and  to  improve 
operating efficiency. For each firm involved, the supply chain relationship reflects strategic choice. A 
supply  chain  strategy  is  a  channel  arrangement  based  on  acknowledged  dependency  and  relationship 
management.  Supply  chain  operations  require  managerial  processes  that  span  across  functional  areas 
within  individual  firms  and  link  trading  partners  and  customers  across  organizational  boundaries 
[Bowersox, Closs and Cooper: 2002: 5].  
Frazzelle defines the Supply Chain as the network of facilities (warehouses, factories, terminals, ports, 
stores, and homes), vehicles (trucks, trains, planes, and ocean vessels), and logistics information systems 
(LIS) connected by an enterprise’s supplier’s suppliers and its customer’s customers. Logistics is what 
happens  in  the  supply  chain.  Logistics  activities  (customer  response,  inventory  management,  supply, 
transportation, and warehousing) connect and activate the objects in the supply chain. To borrow a sports 
analogy, logistics is the game played in the supply chain arena – Frazzelle says [Frazelle: 2002: 8]. 
The GSCF (Global Supply Chain Forum) defines supply chain management as "the integration of key 
business  processes  from  end  user  through  original  suppliers  that  provides  products,  services,  and 
information that add value for customers and other stakeholders"
49. There are now here presented four 
different definitions. CSCMP considers Supply Chain Management as the management of procurement, 
conversion and logistics activities (planning), but also the coordination of the channel partners. Bowersox 
and his colleagues underline the relational character of the channel partners. Frazzelle comes and says that 
logistics is the game played in a supply chain arena. The final definition spreads out the area of the Supply 
Chain Management and identifies the subject of the Supply Chain Management as all the key business 
processes which add value for the stakeholders (including here the customers too). Now that we have met 
the paradox, there is a chance to make some improvements. But this paradox exists already for several 
years. We can say that these are not paradoxes, but paradigms. 
                                                            
48 Their history from www.cscmp.org, page accessed at 15.05.2007. 
49  Considering  their  site:  http://www.fisher.osu.edu/centers/scm/research-publications/scm,  accessed  at 
15.05.2007. 318 
 
Figure 1: Four paradigms regarding Supply Chain Management 
We cannot say that there are bad or good paradigms, but the lenses that you use to see the world will tell 
you the problems, the solutions for these problems. But a paradigm is as lenses are. Frazzelle tries to solve 
logistics problems saying that these are Supply Chain Management problems, CSCMP will focus also on 
collaboration problems, Bowersox will solve also strategic problems related to the Supply Chain, while 
GSCF  will  try  to  improve  the  performance  of  the  Supply  Chain  processes,  comprising  logistics, 
collaboration, strategies, but thinking at all stakeholders affected by these processes. 
Describing  the  history  of  the  Supply  Chain  Management,  Delfmann  and  Albers  [Delfmann&Albers: 
2001] identified several paradigms for this notion, but also identified the main goals and objectives of the 
Supply Chain Management. 
They identify four Supply Chain Management paradigms, some of them similar to the previous paradigms 
remembered before in this this paper: 
1.  The  functional  chain  awareness  school  (Houlihan’s  definition  from  1988):  “Supply  Chain 
Management covers the flow of goods from supplier through manufacturer and distributor to the 
end user”; 
2.  The linkage / logistics school (Turner’s definition: “SCM is a technique that looks at all the links 
in the chain from raw material suppliers through various level of manufacturing to warehousing 
and distribution to the final customer.”; 
3.  The information  school (Johannsson’s definition:”SCM  requires all participant of  the supply 
chain to be properly informed. With SCM, the linkage and information flows between various 
members of the supply chain are critical to overall performance”; 
4.  The integration / process school (Lambert’s definition): “The integration of business processes 
across the supply chain is what we are calling SCM”.  
While  the  first  paradigm  makes  the  link  with  the  Porter  value  chain,  the  second  focuses  on  logistics 
activities inside supply chain, the third focuses on information transfer between channel participants, while 
integration is the subject of the fourth paradigm.  
Why supply chains? Why Supply Chain Management? 
Oliver and Weber [Delfmann & Albers : 2001 : 11, Woxenius: 1998: 58] introduced the ideea of Supply-
Chain-Management. They motivate this evolution [Delfmann & Albers : 2001 :8, accordingly to Oliver, K., 
Webber, M., Supply-chain management: logistics catches up with strategy in: Logistics. The strategic 
issues, Christopher, Martin, Chapman&Hall, Londra, 1992, pag. 63-75]: “What were hitherto considered 
All key processes which add value for stakeholders 
 
 
 
 
 
 
 
 
 
 
 
 
GSCF vision  
 
Strategic positioning and operational efficiency, 
the goal of the collaboration 
 
 
 
 
 
 
 
 
Bowersox and his colleagues  
Collaboration with channel partners 
 
 
 
CSCMP vision 
 
Logistics - Frazzelle  319 
‚mere’ logistics problems have now emerged as much more significant issues of strategic management... 
We needed a new perspective and, following from it, a new approach: Supply Chain Management.”  
Considering this motivation, we can say that Supply Chain Management can never be considered as the 
management  of  the  logistics  of  the  supply  chain.  The  new  paradigm  which  occured  after  logistics 
integration has a strategic feature with no doubt. Of course, the opinions may vary, as we saw for example 
Frazzelle considers only logistics to be the game played in the supply chain. 
Why Supply Chain Management?  
We can say that we see things thinking at the benefits one thing could bring to us. Because there is a 
chance to improve logistics performance more then this was made through logistics integration at firms 
level,  because  there  is  a  chance  to  improve  the  chain  participants’  performances  through  information 
sharing more then it was possible at firms level or just because collaboration at processes level means 
possible better performance for each company. 
Delfmann and Albers also identify the main advantage that Supply Chain Management could bring to a 
chain, to a value chain, if we take into account the Porter’s paradigm.  
Bowersox  and  his  colleagues  focuses  on  the  logistical  main  advantage  of  a  supply  chain  approach 
[Bowersox, Closs and Cooper: 2002: 5]. They say that the six-sigma errors level is present for actual 
businesses. Perfect timing at the perfect location, the right in good state product for the right quantity is no 
longer an impossible logistics dream. It is no longer a dream, it is the usual customer expectation, and it is 
a standard, even with lower costs. This is what they call the “supply chain revolution”. 
1.3. New Supply Chain Management paradigms 
1.3.1. SCM as an inovation 
A very interesting paradigm regarding SCM is to see it as an innovation. Saad and his colaborators [Saad, 
Jones&James:  2002:  173-183]  realize  a  very  interesting  analysis  of  the  evolution  of  SCM  through 
construction firms. 
SCM can be seen as an example of “evolutionary and cumulative innovation, which is often described as 
emanating from internal programes aimed at improving overall effectiveness”. The focus is now not only 
limited to increasing the internal efficiency of organizations but has been broadened to include methods of 
reducing waste and adding value across the entire supply chain. “It is seen as a set of practices aimed at 
managing and coordinating the whole supply chain from raw material suppliers to end customers and 
which develop greater synergy through collaboration along the whole supply chain”. 
1.3.2. SCM as a win-win relation 
With no doubt the game theory is a well-known tool related also to economy and it has prooved it’s 
applicability  during  time.  This  SCM  paradigm  could  be  intepreted  as  a  more  „hard”  view  regarding 
business relations. 
Jorn-Henrik  Thun  debates  the  potential  of  cooperative  game  theory  for  SCM,  giving  a  mathematical 
approach to SCM results. The game theory can be used to evaluate each firm’s performance and each 
process’ results inside a supply chain.  
This approach was build-up thinking at the SCOR model (Supply Chain Operations Reference Model) 
developed by Supply-Chain Council – SCC. The model is a way to see supply-chains, rather then an 
optimization tool [Stadler and Kigler: 2005: 41]. 
We will present here only the general processes: 320 
 
Figure 2: General processes indetified using SCOR [Stadler and Kilger: 2005: 42, Poirier and Walker: 
2005: 14,  Bolstorff and Rosenbaum: 2003: 5]. 
Plan covers processes to balance resource capacities with demand requirements and the communication of 
plans across the supply chain. Source covers the identification and selection of suppliers, measurement of 
supplier performance as  well as scheduling of their deliveries, receiving of products  and processes to 
authorize payments. In the scope of make are processes that transform material, intermediates and products 
into their next state, meeting planned and current demand. Deliver covers processes like order reception, 
reservation of inventories, generating quotations, consolidation of orders, load building and generation of 
shipping documents and invoicing. In the scope of return are processes for returning defective or excess 
supply chain products. 
2. Adaptive Business Network (ABN) 
Business strategy has reached a turning point in which two opposing forces must be reconciled. At one end 
of the spectrum is the need for stable, efficient processes in a company. At the opposite end is the need for 
instant adaptation to rapidly changing business conditions. Efficiency without adaptability means solving 
yesterday’s business challenges at the lowest possible cost, and adaptability without efficiency allows for 
quick reactions, but inflates cost structure. 
The concept of the adaptive business network developed over several years as the effect of the Internet on 
the structure of the manufacturing industry came into focus. The concept, which offers chances for change 
at logistical activities level, marketing level, strategic management level, was first formally identified by 
Claus Heinrich in his book, Adapt or Die: Transforming Your SupplyChain into an Adaptive Business 
Network (John Wiley & Sons, Inc., 2003).  
Heinrich’s definition for ABN is the next one: an adaptive business network is an integrated, flexible 
network of companies focused on a customer need that responds in real time to changes in the state of the 
network. The adaptive business network involves a three-phase process that is executed repeatedly at all 
levels of every business including planning and execution, which are the foundations of efficiency; sensing 
and responding, which enable adaptability; and learning. The Smart-and-Fresh model Heinrich [Heinrich: 
2003: 33-45] presents to bring into our attention the ABN concept is an example which suggests that not 
only technology is the new trend, but the adaptive character. 
There are practically two SCM models: a linear model and the ABN model. 
 
Figure 3: SCM linear model 
P1 
P2 
P3 
P4 
P5 
P6 
P7 
C1  P8 
P10 
P9 
P11 
Partners 
Coordinator 
C
L
I
E
N
T
S 321 
 
Figure 4: SCM ABN model 
The main advantages that ABN brings are: communication efficiency, collaborative relationships between 
channel partners, instantaneous communication, and minimized bullwhip effect. 
3. Conclusions 
There are several ways to make business better. One alternative is collaboration and the most used term to 
denote collaboration relations between companies is Supply Chain Management. This new born business 
field has not yet finished its evolution. 
In previous decades SCM was recognized as a coordinator game, a great company which builds up a chain 
which is going to satisfy clients. 
That is no more sufficient. Companies want also independence as people do: collaborate but don’t forget 
who you are! This is maybe the slogan which Adaptive Business Network incorporates. 
References: 
1.  Bowersox, D., Closs, D., Cooper, B., Supply Chain Logistics Management, McGraw-Hill, New-
York, 2002; 
2.  Saad,  M., Jones,  M.,  James,  P.,  A  review  towards  the  adoption  of  supply  chain  management 
(SCM) in construction, European Journal of Purchasing &Supply Management, Volume 8,  pages 
173-183, 2002; 
3.  Frazzelle,  E.,  Supply  Chain  Strategy,  The  Logistics  of  Supply  Chain  Management,  Editura 
McGraw-Hill, New-York, 2002; 
4.  Delfmann,  W.,  Albers,  S.,  Supply  Chain  Management  in  the  Global  Context,  Working  Paper 
no.102,  Universitat  zu  Koln,  2001,  accessed  at  http://www.uni-koeln.de/wiso-
fak/planung/download , in 22.09.2006; 
5.  Woxenius, J., Development of small-scale intermodal freight transportation in a systems context, 
Report 34 Chalmers University of technology; 
6.  Kotzab,  H.,  Seuring,  S.,  Muller,  M.,  Reiner,  G.,  Research  methodologies  in  Supply  Chain 
Management, Physica-Verlag, Heidelberg, 2005; 
7.  Poirier,  C.,  Walker,  J.,  Business  process  management  applied:  creating  the  value  managed 
enterprise, J. Ross Publishing, United States of America, 2005; 
8.  Bolstorff,  P.,  Rosenbaum,  R.,  Supply  Chain  Excellence:  A  Handbook  for  Dramatic 
Improvement Using the SCOR Model, AMACOM, 2003; 
9.   Stadler, H., Kilger, C., Supply chain management and advanced planning, Concepts, Models, 
Software and Case Studies, Third Edition, Springer, Berlin, 2005; 
10.  Heinrich, C.,  Adapt or Die: Transforming Your SupplyChain into an Adaptive Business Network, 
John Wiley & Sons, Inc., 2003;  
P1 
P2 
P3 
P4 
P5 
P6 
P7 
C
P8 
P10 
P9 
P11 
Partners 
Coordinator 
C
L
I
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T
S 

A review towards the adoption of supply chain management (SCM) in construction,

Adapt or Die: Transforming Your SupplyChain into an Adaptive Business Network,

Business process management applied: creating the value managed enterprise,

Development of small-scale intermodal freight transportation in a systems context,

Supply Chain Excellence: A Handbook for Dramatic Improvement Using the SCOR Model,

Supply Chain Logistics Management,

Supply chain management and advanced planning, Concepts, Models, Software and Case Studies, Third Edition,

Supply Chain Management in the Global Context, Working Paper no.102, Universitat zu Koln,

Supply Chain Strategy, The Logistics of Supply Chain Management, Editura McGraw-Hill,

“SUPPLY CHAIN MANAGEMENT OR ADAPTIVE BUSINESS NETWORK? – COORDINATION VERSUS COLLABORATION”

http://steconomice.uoradea.ro/anale/volume/2008/v4-management-marketing/056.pdf

“SUPPLY CHAIN MANAGEMENT OR ADAPTIVE BUSINESS NETWORK? – COORDINATION VERSUS COLLABORATION”

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