Development of a three-echelon SC model to optimize coordination costs

The purpose of this study is to suggest a conceptual framework for aligning the strategic issues and the structural issues of supply chain management, and also to disclose the effect of E-business application on such an alignment. The number of suppliers, number of tiers, the level of SC integration, order penetration point, lead time, and safety stock are defined as supply chain structural issues, and the characteristics of traded products and buyer–supplier relationship are set as key strategic issues for efficient construction of supply chain structure. E-business application is designed as a moderate variable for the alignment between the strategic issues and the structural issues of supply chain management. Such effort suggests a conceptual framework required for developing an advisable set of E-business application strategies for the efficiency improvement of overall supply chain management. The empirical research model proposed in this work may be used to establish an E-supply chain progression paradigm and a new dimensional manufacturing strategy framework in the E-business era.