B-Kay Tech: Horizontal Collaboration in Logistics
(4 pages of text)
In 2016, the supply chain director of B-Kay Tech, a multinational company headquartered in Belgium, had devised a logistics innovation project based on collaborative shipping, through which partner companies’ shipments could be proactively bundled in the same transport—without traditional, reactive third-party groups. With this system, any available space in one company’s transport facility could be utilized to transport shipments for the other company, reducing the overall number of trucks used and positively impacting greenhouse gas emissions. For this collaboration, the director had identified a potential partner in WARE-TOUCH, a U.K.-based multinational company that produced and distributed everyday consumer goods throughout Europe and the Middle East. The supply chain director at B-Kay Tech had to propose a gainsharing mechanism to convince WARE-TOUCH that a collaboration between the two companies would have been beneficial.
This case is ideal for undergraduate or graduate courses that illustrate how collaboration in transport can affect companies’ logistic costs, and how the gains resulting from the collaboration can be divided. It is an effective negotiation exercise, as students can act as one of the partnering companies to discuss the redistribution of costs. It can be used in operations management or supply chain management courses, or in stand-alone modules or workshops focused on (horizontal) collaboration, gainsharing, or cost allocation methods. Where students have sufficient managerial supply chain knowledge, the case can serve as a negotiation exercise to move beyond negotiating on cost only. The case intends to achieve the following objectives:
- Introduce the concept of horizontal collaboration in logistics.
- Explain how to share the benefits of collaboration among the involved partners and look at various methods for doing so, to see how different allocation rules can lead to highly different outcomes.
- Encourage students to think about which costs should be redistributed between the collaborating partners in question, and how to arrange the necessary synchronization of shipments.
- Make students aware of non-cost elements that can be affected through collaboration.
Transportation and Warehousing
World, Medium, 2016
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