Supply chain management systems are an interorganizational system that helps to coordinate and integrate the different activities of a supply chain. It is a system that allows companies to manage their supply chain processes, such as procurement, production, distribution, logistics, and customer service. It helps to improve the efficiency, cost-effectiveness, and performance of the supply chain. It also helps to improve customer service, reduce costs, and increase profits. It can be used to optimize the flow of materials, information, and money throughout the supply chain.

Interorganizational system

One interorganizational system (iOS) is a system between organizations, or “system of information shared among a group of companies”. The most common form of interorganizational system is electronic data interchangethat allows the instantaneous transfer of information from computer to computer.

Overview

Interorganizational systems allow the flow of information to be automated between organizations in order to achieve a desired goal. supply chain management system, which allows the development of competitive organizations. This supports forecasting customer needs and delivering products and services.

The interorganizational system helps better manage buyer-supplier relationships by covering the full depth of tasks associated with business processes across the enterprise. By carrying out these activities, an organization is able to increase productivity automatically; therefore, optimizing communication at all levels of an organization, as well as between the organization and the supplier. For example, every T-shirt sold at a retail store is automatically communicated to the supplier who, in turn, will ship more T-shirts to the retailer.

An interorganizational system is an information system shared by one or more suppliers and customers.

Organizations may pursue an interorganizational system for the following reasons:

  1. Reduce risk in the organization
  2. To stalk Scale economy
  3. Benefit from technology exchange
  4. Increase competitiveness
  5. Overcome investment barriers
  6. Encourage global communication

An example of an interorganizational system is the Saber (computer system).

“Understanding environmental uncertainty is leading to horizontal relationships between organizations.”

References

Further reading

  • Contractor FJ, P. Lorgance [eds.]. Cooperative Strategies in International Business Lexington Books, 1988.
  • Haag, Cummings, McCubbrey, Pinsonneult and Donovan. Information Management Systems for the Information Age McGraw-Hill Ryerson. 1996. pg. 26-27
  • Nelson, Shaw. The adoption and diffusion of interorganizational systems standards and process innovations University of Illinois. June 26, 2006. (online)


Source: Interorganizational system
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