Nadia Lehoux

A framework for an efficient implementation of logistics collaborations

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 efficiently build and manage inter-firms relationships. Moreover, we propose five coordination mechanisms that contribute to ensure information sharing, the coordination of logistics activities and the share of benefits. Case studies are used to demonstrate the utility of the framework.

Inter-firm collaborations and supply chain coordination: review of key elements and case study

Considering the effects of globalisation, the increase of production and energy costs, and the introduction of advanced technologies, companies need to change their way of doing business if they want to stay competitive. One way of doing this is to establish collaborations with suppliers, distributors and retailers, in order to exchange products efficiently and create value for customers. Nevertheless, the structure of the collaboration must be designed carefully and some coordination mechanisms must be implemented to support this way of doing business. In this article, we first analyse: why companies work together, how they should build their partnership, and which strategies they can implement to facilitate coordination of supply chain activities. We then report a case study of collaboration in the forest industry that shows the benefits of implementing coordination mechanisms as well as the necessity of using incentives to better share these benefits.

Collaboration for a two-echelon supply chain in the pulp and paper industry: the use of incentives to increase profit

In our research, we study the case of a pulp and paper producer who decides to establish a partnership with one buyer. Using two different types of relationship, namely a traditional system without any collaboration scheme and Collaborative Planning, Forecasting and Replenishment, we develop decision models describing the producer and the buyer planning processes. We also identify which approach is more profitable for each actor as well as for the network, based on real costs and parameters obtained from the industrial case. We then test how different incentives can improve the traditional system and provide higher gains for each partner. Our results show that using incentives increases the systems profit by up to 4% if parameters are well defined.

A win-win collaboration approach for a two-echelon supply chain: a case study in the pulp and paper industry

Because of international competition, the development of new technologies and the increase of production and energy costs, enterprises must improve their supply chains and change their ways of doing business. They also have to collaborate with their suppliers, distributors and retailers in order to better respond to market demand. This kind of relationship can be based on well-known collaboration models like collaborative, planning, forecasting and replenishment (CPFR) or vendor managed inventory (VMI), so as to correctly exchange products and information. However, it is necessary to choose the right collaboration approach that will be profitable for all partners. In this article, we study different collaboration strategies between a pulp and paper producer and its retailer. For this particular context, we identify the collaboration mode that is the most profitable for each actor, based on real costs and parameters obtained from the industrial case. We also develop a method to better share collaboration benefits and ensure a relationship advantageous for everyone. We demonstrate that if the producer shares a part of the transportation or inventory savings with its partner, the CPFR method can be profitable for both partners and generate the greatest total system profit. [Received 3 October 2008; Revised 6 April 2009; Accepted 23 November 2009]

Coordinating a green reverse supply chain in pharmaceutical sector by negotiation

We propose a coordination model for a real pharmaceutical RSC.Using data from a real case study, a single period tactical planning model is developed.An appropriate method to share the network gain from an improved co-ordination is suggested. This paper investigates the pharmaceutical reverse supply chain. For this industry, the reverse supply chain is usually not owned by a single company. A decentralized negotiation process is thus presented in order to coordinate the collection of unwanted medications at customer zones. Using a Lagrangian relaxation method, the model is solved for a real generic pharmaceutical company. Coordination efforts are required from the supply chain entities, facing environmental regulations, to collect and recycle unwanted medications. Therefore, a bonus sharing technique is also proposed based on each entitys investment in the coordination process. Some numerical results are presented and discussed for two case studies. It shows that up to 28% more products could be collected if companies coordinate their operations efficiently. Besides, future insights on the same network are highlighted.

Issues and Experiences in Logistics Collaboration

Collaborative logistics is becoming more important in today’s industry. This is driven by increased environmental concerns, improved efficiency through collaborative planning supporting resources sharing and new business models implementation. This paper explores collaborative logistics and reports on business applications within the forest products industry in Sweden and Canada. It first describes current opportunities in collaborative planning. It then discusses issues related to building the coalition as well as sharing resources and benefits. Three business cases are described and used to support the discussion around these main issues. Finally, different challenges are detailed, opening new paths for researchers in the field.

Evaluating order acceptance policies for divergent production systems with co-production

The impacts of using different order acceptance policies in manufacturing sectors are usually well known and documented in the literature. However, for industries facing divergent processes with co-production (i.e. several products produced at the same time from a common raw material), the evaluation, comparison and selection of policies are not trivial tasks. This paper proposes a framework to enable this evaluation. Using a simulation model that integrates a custom-built ERP, we compare and evaluate different order acceptance policies in various market conditions. Experiments are carried out using a case from the forest products industry. Results illustrate how and when different market conditions related to divergent/co-production industries may call for available-to-promise (ATP), capable-to-promise (CTP), and other known strategies. Especially, we show that advanced order acceptance policies like CTP may generate a better income for certain types of market and, conversely to typical manufacturing industries, ATP performs better than other strategies for a specific demand patterns.

Centralized supply chain planning model for multiple forest companies

ABSTRACT In this paper, we present a mathematical model to plan logistics activities in a forest products supply chain. In particular, a mixed-integer linear program is developed to maximize the total profit of the value chain, involving decisions related to the volumes of wood to harvest and to keep in stock, as well as the quantities to deliver to each business unit to meet market demand. The model also includes different constraints concerning fibre freshness across the network (forest, sawmills, and paper mill), as this has an effect on operation costs and supply decisions. Various scenarios based on the demand variation, price fluctuations, and wood aging levels are tested, followed by a sensitivity analysis. Results show that price and demand variations as well as fibre freshness are important criteria to consider in the procurement and production planning for increasing the forest supply chain benefits. The scenarios analysed also confirm the usefulness of the model in guiding companies to make adequate planning decisions according to their business environment.

Generic Mechanisms for Coordinating Operations and Sharing Financial Benefits in Collaborative Logistics

Collaborative logistics is increasingly emerging as a new opportunity for cost reduction through internal and cross chains coordination. This paper presents different coordination mechanisms to support collaborative logistics. These mechanisms are differentiated by their planning function, their sharing approach and the information, decision and financial flows. Often, the logistics planning is run first, and secondly, the sharing is set on the basis of the plan. However, recently, new approaches have been proposed where both the logis- tics plan and the sharing are optimized simultaneously. Constraints on the fi- nancial flows also introduce specificities to the coordination mechanisms and these are described and discussed. Finally, the proposed coordination mecha- nisms are used to describe a series of research and applied projects in which collaborative logistics has been implemented.

Benefits of inter-firm relationships: application to the case of a five sawmills and one paper mill supply chain

ABSTRACT To access new markets and efficiently satisfy customer demand, many companies have decided to create collaborations with their suppliers, distributors, and even competitors. In this way, they can share the information needed to plan supply chain activities adequately while generating benefits that would not be achievable individually. In this project, we have studied the case of five sawmills that all shared the same important customer for their wood chip. That customer, a major paper mill, was facing significant difficulties and needed to benefit from more reliable, predictable and cost competitive wood flow from its suppliers. The main goal of the research was, therefore, to develop a collaboration scheme that would help these forest products companies to work together and to achieve in the long-term higher profitability. Results showed that sawmills could improve their profit by up to 44% by managing inventories for their main customer or jointly plan supply chain operations. Furthermore, based on game theory techniques such as Shapley value, we observed that greater collaboration may not be equally profitable for each supply chain member regarding their contribution. In our case study, the paper mill would need to share a portion of the benefits with its suppliers to ensure win–win collaboration.