What does the term 'Keiretsu' refer to?

The term 'Keiretsu' specifically refers to a network of interlinked corporations that cooperate for mutual benefit, often involving suppliers becoming part of a company coalition. This concept is common in Japanese business culture, where companies create a close-knit relationship between manufacturers, suppliers, and even financial institutions. By forming these coalitions, companies can enhance collaboration, improve efficiencies, and maintain a stable supply chain.

In a Keiretsu, the various entities involved retain their independence but are bound by long-term relationships and mutual trust, which can lead to shared resources and information, enabling better strategic decisions. This contrasts with other concepts in supply chain management that focus on more traditional, transactional relationships or a singular entity exerting control over all supply chain activities. The cooperative nature of Keiretsu aligns well with the principles of lean manufacturing and just-in-time production, as it facilitates a proactive and integrated approach to managing supply chain operations.