A framework for an efficient implementation of logistics collaborations

Abstract

In order to beat the competition, access new markets, and respect operational, social, and environmental constraints, enterprises establish collaborations with many other business entities. Furthermore, with costs and information sharing, organizations have the opportunity to optimize their logistics activities. However, each enterprise has its own objectives and typically makes its own planning decisions to meet these objectives. Therefore, it becomes crucial to determine how business entities will work together as well as the value of the collaboration. Specifically, it is necessary to identify how logistics activities will be planned and executed, who will take the leadership of the collaboration, and how benefits will be shared. In this article, we explain how to efficiently build and manage inter-firm relationships. Moreover, we propose five coordination mechanisms that contribute to ensure information sharing, the coordination of logistics activities, and the sharing of benefits. Case studies are used to demonstrate the utility of the framework. decision-making process and ensure the stability of the relationship. Partners will typically be ready to collaborate if they can obtain greater benefits than those obtained individually. Therefore, it becomes crucial to determine how to build and manage collaborations efficiently, as well as how to share benefits equitably to ensure the long-term stability of the collaboration. In particular, it is necessary to determine which entity or entities should lead the relationship, what are the specific objectives, and which information should be shared to support the collaboration. It is also essential to identify the value of the collaboration as well as how benefits will be shared.In this paper, we explore how to build and manage profitable logistics collaborations (Fig. 1). Specifically, we first explain the main stages for building an inter-firm relationship, namely the objectives to reach, the organization of the collaboration to implement, and the partners to select. We then describe how to manage collaborations in order to ensure profitable long-term relationships. Therefore, different types of leadership are examined. Five generic coordination mechanisms (CMs) are also proposed to support information sharing, the planning and execution of logistics activities, and benefit sharing. These mechanisms aim to help managers in designing their collaboration schemes. Moreover, the nature of the information to share and the tools to implement so as to support the partnership are analyzed. Finally, we present three case studies that show how enterprises have implemented logistics collaborations in practice and we relate these case studies to the generic CMs proposed. Some concluding remarks conclude the paper.

Current economic downturn and supply chain: the significance of demand and inventory smoothing

“…However, this tuning has to be promoted by the manufacturer with the creation of coordination incentive mechanisms in the downstream. This clearly suggests that the benefits gained by each entity when properly shared, makes the collaboration acceptable for everyone (Audy 2012).…”

“…As a result, the wholesaler and the manufacturer will receive a volatile demand signal. A potential solution for this dilemma can be represented by the 'sharing of benefits' between partners (Audy 2012). In other words, upstream parties have to compensate the downstream party for the advantage they receive.…”

Inter-Enterprise Architecture and Internet of the Future

“…However, this generic process has not taken a certain crucial aspect into account: the definition of how to share benefits equitably to ensure the stability of the collaboration [9]. The solution to this problem is provided by [10], which proposed the definition of a system of compensatory payments, which may agree with the definition phase of the negotiation and exception handling and can be implemented when evaluating the results.…”

Towards Interoperability through Inter-enterprise Collaboration Architectures

“…According to [40], collaboration process consists of six activities: 1) Definition, 2) Local domain planning, 3) Plan exchange, 4) Negotiation and exception handling, 5) Execution and 6) Performance measurement. However, in this generic process is not taken into account a crucial aspect in order to determinate an efficient collaboration, this aspect refers to how to share benefits equitably to ensure the stability of the collaboration [41]. The solution to this is provided by [39], who proposes the definition of a system of compensatory payments, which could be agreed on the definition phase of the negotiation and can be implemented when the results will be evaluated.…”