On the website of the society of entrepreneurs “EVO”, Jack van der Veen states that the world of logistics can be characterized by cooperation. Van der Veen is a professor of Supply Chain Management at Nyenrode Business University. He furthermore states that companies as well as individuals want to be seen and want to get credits for their actions. Specialization is their way for achieving this. He notices that cooperation and aiming for specialization is paradoxical. Cooperation is about working together, to come up with the best end result possible. On the other hand, by specializing, one attempts to be the best in a particular business. This implies pursuing your own goals. Specialization means only taking account for a very small amount of actions. A suboptimal result is much more likely in this case because everybody acts in a way that is best for their business. Van der Veen states that a higher welfare makes that people need others even more.
The paradox is thus the difference between individual goals and a common end result and the fact that although this discrepancy companies seek cooperation and outsource activities.
Although the existence of a paradox seems logical, an egocentric way of running your business does not imply a suboptimal end result, in my opinion. Consider a company that builds cars. The core business of that company could be buying parts, the development of new cars and the assembly and sale of the cars. For running the business, many non core activities must be performed. Think for instance about shipment from suppliers and to buyers, warehousing of finished cars and the performance of all kind of (financial) services to its customers. These noncore activities require knowledge and physical assets. Since these activities are not core to their original business, it is conceivable that these activities cannot be performed on a high level. Consequences could be late delivery, damage of cars stored etc. This will result in decrease of image and quality and an increase of total cost. Therefore it is useful to consider whether the cost of performing these activities can be lowered and the performance can be improved to make them core activities. When that is not possible it is better to outsource these activities and to use the qualities of other parties. Using the expertise of other companies, the quality of your own product will increase while costs are likely to decrease. When all companies among the supply chain perform at their best, at the end a better product for a lower price can be offered. Therefore, a company can only outstand others by recognizing performances of others. This implies proper cooperation. So I think cooperation and specialization is not paradoxical.
The original blog-item by Jack van der Veen can be found at: http://www.evo.nl/site/blog-terug-naar-de-bron-van-logistieke-samenwerking
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