The emergence of the extended enterprise, a group of strategically aligned companies focused on new market opportunities, signals a fundamental change in the nature of competition, a rethinking of traditional supply chain relationships, and a new role for logistics. Because of its ability to span the multiple functions and boundaries of the organization, logistics is poised to become a critical core rather than support function, coordinating and integrating supply chain activities that create both corporate and customer value. This article describes an information-rich logistical environment for the extended enterprise in which transportation and manufacturing activities are fully integrated into a new product delivery process. This process is organized around economies of conjunction in much the same way that mass production is organized around economies of scale. Economies of conjunction derive from the way enterprise members share information and transact their business. Deep information exchange among enterprise members presents opportunities to build knowledge-based logistical tools that create innovative sources of competitive advantage.
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