What is the concept called when all stages of a supply chain aim for total profitability rather than individual gains?

The concept in which all stages of a supply chain aim for total profitability rather than individual gains is known as supply chain coordination. This approach emphasizes collaboration among all partners in the supply chain to achieve a common goal of maximizing overall profitability. By aligning their operations and strategies, companies can streamline processes, reduce costs, and improve service levels, ultimately enhancing the mutual benefits for all parties involved.

In supply chain coordination, entities focus on sharing information, resources, and capabilities. This cooperation enables them to make decisions that benefit the entire supply chain instead of just individual companies. As a result, it fosters a cohesive environment where everyone works towards joint objectives, thereby improving overall performance.

Other terms such as supply chain integration, optimization, and segmentation each have their distinct focuses. While integration looks at how different components of a supply chain connect and function together, and optimization focuses on maximizing efficiency or specific metrics, coordination is uniquely about achieving aligned profitability across all stakeholders. Segmentation, on the other hand, pertains to categorizing products or processes to tailor strategies effectively but does not inherently address the profitability of the entire chain collectively. Understanding these distinctions clarifies why supply chain coordination is the correct term that describes this holistic profitability approach.