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What is Collaborative Commerce?

Malcolm Tatum
Updated May 16, 2024
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Also known as c-commerce, collaborative commerce is a business strategy that calls for looking at the process of supply chain management in a new way. Instead of seeing the elements of the chain as independent entities that have no more than a tenuous connection with one another, each organization involved in the supply chain views itself as being directly involved with all the other organizations. In order to fully implement this different approach, the partners involved in the chain make use of electronic or e-commerce to develop new and more efficient ways of communication and interacting with one another. As a result, each partner benefits in terms of managing costs, lower rates of errors along the chain, and in general a more efficient process that begins with the manufacturer and ends with the customer.

In a collaborative commerce environment, one of the first steps in improving communication is to utilize a standard business language. This approach makes it much easier to minimize the chance for miscommunication somewhere along the supply chain. For example, it is not unusual for various partners in a supply chain to use slightly different names for various components. By standardizing the name of the component all the way through the chain, there is much less opportunity for anyone along the way to misinterpret which product is required to fill an order.

Collaborative commerce also utilizes the establishment of the use of interactive communication technology that makes it possible for each partner in the chain to see the entire history of an order. Thanks to Internet technology in particular, it is possible to provide limited access to networks and programs used by each partner. In the event there is a question regarding the current status of an order making its way through the supply chain, it is relatively easy for any of the partners to access this virtual pipeline. Once logged into the collaborative commerce chain, they can determine the real-time state of the order, and thus be able to have a good idea of when the order will reach the next stage of fulfillment.

The management options provided by collaborative commerce are geared for use in a world where international commerce is increasingly the standard in just about every industry. When structured to best effect, the communication line established by this process easily crosses over boundaries of culture and location, allowing the flow of information to proceed with the highest degree of efficiency. Ultimately, this efficiency translates into fewer errors, lower costs, and order delivery that allows all businesses involved in the chain to enjoy higher profits and productivity.

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Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By Markerrag — On May 04, 2014

@Logicfest -- I wouldn't be too critical of some of the flashier businesses that came out of the dot com boom. After all, the ones that did manage to unify supply chains under collaborative commerce (and through other innovations) are still with us and are now some of the most valuable companies on the planet. Those are the businesses that realized that things had changed but that solid, time-tested fundamentals were still essential.

By Logicfest — On May 03, 2014

One of the untold stories from the "dot com" revolution in the 1990s and early 2000s was that the supply chain guys were excited about collaborative commerce. While the rest of the world was going wacky for the ability to buy dog food on the Internet, more traditional businesses saw the ability to unify supply chains through the Web as the real revolution. They were fascinated by the back end stuff that the public didn't see rather than headline grabbing developments such as, well, buying dog food online.

The press rather missed the boat on this one, huh?

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
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