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A lack of trust among trading partners often creates a condition where every transaction has to be scrutinized and verified, thereby increasing the transaction costs to an unacceptably high level. Productivity is lost and efficiency and effectiveness, cornerstones of supply chain goals, will be compromised. Creating value-added activities with such partners becomes almost impossible and the supply chain tools used to improve efficiency, effectiveness and productivity, such as vendor-managed inventory (VMI), cross-docking (CD), and collaborative forecasting, planning and replenishment (CFPR)) eventually become ineffective. Under the less than open-trust conditions, decision makers often spend their time mostly on analyzing their trading partner's credibility, reliability and trustworthiness, rather than optimizing their operations. What is our opinion? Word count is 350 Harvard Referencing with minimum of 4
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