STRUCTURAL SEPARATION In a competitive environment, single enterprises acting alone cannot fully achieve all management goals.

As customer demands increase and become more specific firms must undertake initiatives to coordinate responsibilities across the supply chain in order to improve service and lower costs. The problem is that different firms typically operate under different management philosophies and pursue divergent goals. Successful relationships require managers to rethink the way they conduct business with suppliers and customers so that the benefits of integrated and focused supply chain strategies can be achieved. The supply chain is not a chain of businesses with one-to-one, business-to-business relationships, but a network of multiple businesses and relationships. The lobal Supply !hain "orum has a following definition# Supply Chain Management is the integration of ey !usinesses pro"esses from en# user through original suppliers that pro$i#es pro#u"ts% ser$i"es an# information that a## $alue for "ustomers an# other sta ehol#ers&' ( Lam!ert)Cooper *+++% ,, The relatively recent incorporation of the term network into supply chain management research can be seen as an attempt to make the concept wider. A network is a structure where a number of nodes are related to each other by specific threads.$ %"ord et al. &''(, )*(+ Supply networks can be defined as: sets of supply chains, describing the flow of goods and services from original sources to end customers ( amming et al. !""", #$#% The business network approach assumes that the systems are open and thus, the network is embedded in and interacting with its environment. "irms in business-to-business markets are embedded in a comple, network of relationships with suppliers, customers as well as a number of other stakeholders. -owerso, %)./*, ).*0+, introduced the idea of channel separation with two flows that he called transa"tion "reating efforts an# logisti"al efforts. In order to achieve a satisfactory marketing process, a flow of transaction creating efforts and a flow of logistical efforts must e,ist and be coordinated. 1an 2amme3s and 4loos van Amstel3s %)..0+ division for logistics activities cover physical flows, and information flows. Abrahamsson and -rege %)../+ offer three flows# materials, physical distribution, and sales. 5oreover, !ooper et al. %)../+ propose several processes crossing boundaries within the company and between the companies. They do not discuss about flows, but the processes they mention are very similar to flows discussed and they are# product flow, customer relationship management, customer service management, demand management, order fulfillment, manufacturing flow management, procurement, product development, and commerciali6ation and return channel.

7oosenbloom %)..8+ suggests five flows in marketing channels# product flow, negotiation flow, ownership flow, information flow, and promotion flow. 9ften logistics is not observed as a separate channel. :owever, logistics is observed important and is determined as a process of systemati6ing information to facilitate the efficient and cost effective flows of goods and services to generate customer satisfaction %4elton et al. )../+. All together from the literature at least ten flows that can be separated from each others such as marketing flow, promotion flow, selling flow, ordering flow physical distribution flows, product development flow, product flow, information flow, return flow and ownership flow. In modern era organi6ations separate four flows of channels to describe the structure of and better manage the supply chains. These are selling. ordering, physical distribution, and payment channels. These four separating channels are discussed under the term ;Channel or Structural Separation$ %-ask < 1eps=l=inen )../, -ask )...+. !hannels are described as # Selling Channel is a chain of companies concerned with all the operations in sales activities and decisions, from available possibilities as well as new structures for selling channel choices. !hannel is responsible for serving customers with flow of all information concerning products and services Ordering Channel is a chain of companies that consists of all the operations concerning ordering activities as well as decisions about ordering channel3s structure Physical Distribution Channel is a chain of companies that are concerned with product planning, production and physical movement of different types of products and decisions for the structuring of these activities starting from raw materials ending at final products Payment Channel is a chain of companies covering the decisions and structures concerning payment, insurance, and finance activities in the supply chain