Collaborative Logistics is driven by a changing corporate vision that views competition and suppliers as potential collaborative partners for the present scenario of logistics. As the past few years, development of technology thus it has become clear that many companies have reduced manufacturing costs as much as is practically possible. Thus, according their belief, the next step that is needed to take, in order to increase the profit and the market share, lie in their supply chain.
Properly executed, collaborative logistics can significantly leads to reducing the costs, improve supply chain efficiency, and make trading partners more flexible and sustain in addressing shifts in consumer demand. Therefore, both cost as well as service improvements are expected (drivers). While these expected effects could be considered as the strongest reason for why companies must collaborate and still a logical framework for collaboration is required to verify those expected effects.
The modern day collaborative logistics are powered by state-of-the-art advanced electronic media and software systems which help organizations with the expansion of these networks on a big scale. It is believed to be the best of both worlds as there is a flow of information, resources, service providers and saving of money.