An Approach to Securely Identifying Beneficial Collaboration in Decentralized Logistics Systems

Abstract

T he problem of sharing manufacturing, inventory, or capacity to improve performance is applicable in many decentralized operational contexts. However, the solution of such problems commonly requires an intermediary or a broker to manage information security concerns of individual participants. Our goal is to examine use of cryptographic techniques to attain the same result without the use of a broker. To illustrate this approach, we focus on a problem faced by independent trucking companies that have separate pick-up and delivery tasks and wish to identify potential efficiency-enhancing task swaps while limiting the information they must reveal to identify these swaps. We present an algorithm that finds opportunities to swap loads without revealing any information except the loads swapped, along with proofs of the security of the protocol. We also show that it is incentive compatible for each company to correctly follow the protocol as well as provide their true data. We apply this algorithm to an empirical data set from a large transportation company and present results that suggest significant opportunities to improve efficiency through Pareto improving swaps. This paper thus uses cryptographic arguments in an operations management problem context to show how an algorithm can be proven incentive compatible as well as demonstrate the potential value of its use on an empirical data set.

A Survey of Privacy-Aware Supply Chain Collaboration: From Theory to Applications

“…Among existing research providing information security mechanisms, protocols, and algorithms between practical supply chain partners, most of the work focused on either vertical collaboration (supplier or manufacturer to retailer or customer) (Atallah, Deshpande, Frikken, and Schwarz 2004;Li and Zhang 2008;Chen, Wang, Liu, and Singh 2011;Zhang et al 2010), or horizontal collaboration (supplier to supplier or retailer to retailer) (Clifton et al 2008;Miller and Tucker 2009). However, privacy protection issues in a full-collaboration relationship incorporating both vertical and horizontal collaborations are seldom studied.…”

“…Many other specific applications in the supply chain have privacy concerns. For example, Clifton et al (2008) focused on a problem faced by independent distributors that have separate pick-up and delivery tasks and wish to swap tasks for enhancing efficiency. They proposed a privacy-preserving technique to limit the revealed information while identifying those swaps.…”

A framework for an efficient implementation of logistics collaborations

“…In logistics, the evaluation of quantitative collaboration benefits is mainly conducted using operational research (OR) models (see, e.g., Cruijssen et al, , ; Forsberg et al, ; Beaudoin et al, ; Ergun et al, ,; Agarwal and Ergun, ,; Clifton et al, ; Lehoux et al, , ,,; Özener and Ergun, ; Frisk et al, ). More precisely, collaborations between entities involve many planning decisions and, consequently, many operational costs and constraints must be taken into account (e.g., production and distribution costs, lead times, distance, stock levels, etc.).…”

“…Several approaches have been proposed in the literature to address such a barrier. For example, Clifton et al () examine the use of cryptographic techniques to perform collaborative logistics among potential competitors' carriers without a broker and with a strictly minimum share in information.…”

Collaboratively Solving the Traveling Salesman Problem with Limited Disclosure

“…The reason for this is the high degree of trust required, wherein proprietary data has to be shared with an external party which can then carry out the optimization. To deal with this, privacy-preserving solutions have been developed to enable collaborative optimization for several specific problems [1][2][3][4][5]. In this paper, we focus on the traveling salesman problem (TSP).…”