Joint route planning under varying market conditions

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -To provide empirical evidence on the level of savings that can be attained by joint route planning and how these savings depend on specific market characteristics. Design/methodology/approach -Joint route planning is a measure that companies can take to decrease the costs of their distribution activities. Essentially, this can either be achieved through horizontal cooperation or through outsourcing distribution to a logistics service provider. The synergy value is defined as the difference between distribution costs in the original situation where all entities perform their orders individually, and the costs of a system where all orders are collected and route schemes are set up simultaneously to exploit economies of scale. This paper provides estimates of synergy values, both in a constructed benchmark case and in a number of real-world cases.Findings -It turns out that synergy values of 30 per cent are achievable. Furthermore, intuition is developed on how the synergy values depend on characteristics of the distribution problem under consideration. Practical implications -The developed intuition on the nature of synergy values can help practitioners to find suitable combinations of distribution systems, since synergy values can quickly be assessed based on the characteristics of the distribution problem, without solving large and difficult vehicle routing problems. Originality/value -This paper addresses a major impediment to horizontal cooperation: estimating operational savings upfront.

Using horizontal cooperation concepts in integrated routing and facility‐location decisions

“…Joint route planning under varying market conditions was analyzed by Cruijssen et al. (). Özener et al.…”

Economies of Product Diversity in Collaborative Logistics

“…Cruijssen et al. () propose a joint route planning method for multiple shippers, which can be executed by third‐party logistics companies (3PLs), and showed that the actual synergy potential depends on the complementarity of order sizes, time windows, and demand locations.…”

Collaborative distribution between two logistics service providers

“…To overcome the obstacles, Cruijssen et al () try to estimate the joint route planning benefits in the special case of a unique DC that is common to all of the partners. By solving a vehicle‐routing problem with time windows, they find that at least 30% savings can be achieved in such a scenario.…”

“…In other words, cooperation should reduce the delivery costs without worsening the service quality (e.g., delivery time). At present, the relevant research on horizontal cooperation clearly shows the high profitability of collaborative distribution among LSPs (e.g., Spiegel, ; Erdmann, ; Bahrami, ; Vos et al., ; Cruijssen and Salomon, ; Cruijssen et al., , , ; Krajewska et al., ; Zhou et al., ; Adenso‐Díaz et al., ). In practice, as a result of the growing customer expectations of quality and service, similar to a shorter waiting time in the logistics industry, LSPs have to consider not only cost savings or incremental profits but also improving service time via collaborative distribution.…”