The impact of various levels of collaborative engagement on global and individual supply chain performance

Abstract

Purpose -Most collaborative SCM research has focused on the ideal situation of a manufacturer engaging with all its downstream partners. In view of extensive entry costs, lack of trust or simply non-suitability of electronic data processing systems this, however, provides only limited support to actual problems of many companies. The paper seeks to investigate various common supply chain performance measures to show what impact increasing adoption of collaborative replenishment between manufacturer and several major customers has on each market participant. Design/methodology/approach -The study uses discrete event simulation to evaluate various adjustments within the distribution frameworks of two food-manufacturers and their major customers. Findings -The analysis suggests that manufacturer and customers can substantially benefit from even a partial increase in demand visibility. This nevertheless can be costly since favouring some customers due to sharing a collaborative replenishment system, while others often seem to experience heavier delivery delays and declining service-level.Research limitations/implications -The research focused on the delivery framework of the two involved manufacturers and the chosen products. Hence, research findings may differ and need to be modified before drawing conclusions for different products, companies or industries. Practical implications -The analysis aims to help practitioners to identify possible opportunities and threats within an expanding collaborative SC replenishment system. Originality/value -Investigating heterogeneous delivery frameworks within an emerging collaboration system has not been addressed much within prior SCM research. It aims to help mainly small-or medium-sized enterprises to reveal possible advantages and drawbacks within the process of emerging with a varying number of customers from a traditional predetermined reorder-point into a collaborative VMI/CPFR system.

A Systematic Literature Review of Collaborative Planning Forecasting and Replenishment

“…When trading partners trust each other they tend to communicate openly and it increases information transparency and decrease gaming (Büyüközkan et al, 2009). Furthermore, several authors have mentioned that a lack of trust serves as a barrier to the implementation of CPFR (Barratt and Oliveira, 2001, Fliedner, 2003, Attaran, 2004, Thron et al, 2006, Attaran and Attaran, 2007, Chen et al, 2007, Småros, 2007, Thron et al, 2007. According to Barratt and Oliveira (2001), as trust is developed from a long-term perspective, a possible approach is to (i) define a single point of contact for each trading partner,…”

“…Other barriers to CPFR mentioned in the literature include investments in technology (Fliedner, 2003, Småros, 2007, a lack of internal integration/collaboration (Fliedner, 2003, Småros, 2007, Ramanathan and Gunasekaran, 2014, a lack of a clear understanding of collaborations and SCC's impact from long-term partnerships on profit earnings (Ramanathan and Gunasekaran, 2014), information security and confidentiality (Büyüközkan et al, 2009, Audy et al, 2012, Büyüközkan and Vardaloğlu, 2012, system incompatibility (Audy et al, 2012), over-dependence on technology when implementing CPFR, lack of ability to differentiate between with whom to collaborate and in what order (Thron et al, 2006(Thron et al, , 2007 and security protocols (Hvolby and Trienekens, 2010). Larsen et al (2003) propose the only maturity model for CPFR encountered in this review.…”

“…Some authors refer to CPFR as an evolution from VMI and CR/CRP (Barratt and Oliveira, 2001, Attaran, 2004, Cassivi, 2006, Thron et al, 2006, Attaran and Attaran, 2007, Danese, 2011 as CPFR captures the advantages of such programmes while adding the collaborative mechanism to facilitate information exchange in a multi-tiered SC (Cassivi, 2006). Some retailers discontinued their VMI project because they were unsatisfied with the results, mainly due to the lack of collaboration, the forecasting ability of the suppliers and the vendors' inability to address product promotions (Sari, 2008b, Yuan et al, 2010.…”

“…Collaboration varies in scope and configuration according to contextual variables, among which market dynamics (demand uncertainty/unpredictability), goals (responsiveness versus efficiency), product diversity (same or different products) and number of partners (spatial complexity) seems to be the most relevant (Danese, 2011 (Fliedner, 2003), although it was later expanded to such a diversified array of industries astransportation, healthcare, automotive, mechanical equipment, agriculture, pharmaceutical, computers, packaging (Attaran, 2004, Danese et al, 2004, Ireland, 2005, Cassivi, 2006, Thron et al, 2006, Danese, 2007, D'Aubeterre et al, 2008, Sari, 2008b, Danese, 2011, Yao et al, 2013, Ramanathan, 2014. Some authors argue that CPFR methodology is applicable to any industry (Fliedner, 2003, Ireland, 2005.…”

“…Originally built as an inter-industry standard, it was designed to move beyond the shortcomings of Electronic Data Interchange (EDI) protocols and the Efficient Consumer Response Movement (ECR), incorporating most of the techniques used to integrate SC partners under the initiatives of Vendor Managed Inventory (VMI) and Continuous Replenishment (CR) (Stank et al, 1999, Barratt and Oliveira, 2001, Larsen et al, 2003, Seifert, 2003, Fliedner, 2003, Attaran, 2004, Cassivi, 2006, Thron et al, 2006, Attaran and Attaran, 2007, Danese, 2007, 2011. The first CPFR pilot project was conducted by Wall-Mart and Warner-Lambert with the goal of being highly responsive to customer demand (Sherman, 1998, Barratt and Oliveira, 2001, Fliedner, 2003, Larsen et al, 2003, Attaran, 2004, Danese, 2006b, Poler et al, 2008, Derrouiche et al, 2008, Burnette, 2010, Lapide, 2010, Ramanathan and Gunasekaran, 2014.…”