From Tactical to Operational Routes in a Grocery Supply Chain - Quantifying the Impact of Increased Information Sharing Between a Wholesaler and a Transport Company
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In this thesis, we quantify the value of information sharing between a wholesaler and a transport company in the Norwegian grocery supply chain. Particularly, we investigate whether sharing of information at an earlier time with a transport company has any benefits to the actors, alone and combined. And if it has, how large are the benefits and why do they arise? Further, we study whether adding extra flexibility to the requirements of each actor impacts the potential benefits. The view on benefits of information sharing in the literature is two-fold. One wing is solely positive, while the other one presents a more skeptical stance claiming benefits are limited due to complexity, cost and risks. Information sharing between actors in a supply chain has been widely investigated. Despite this interest, no or little research considers information sharing with transport providers. We introduce two mathematical models that reflect the planning situation for the wholesaler and the transporter in an optimization framework. Both models' primal goal is to fulfill retailer demand, but they have different incentives. Furthermore, both models represent set covering problem formulations. The models are generic in order to conduct different analysis with them. In order to evaluate the impact of information sharing, we distinguish between three different information sharing cases. The difference lies in when each actor receives information and can make decisions accordingly. We only differ between daily information and weekly information. In the case of daily information, decisions made on one day are independent of decisions made on other days. For weekly information, all decisions are made by considering the entire week as a whole. Additionally, we define two types of added flexibility. Shifting allows transporting demand on a different time than scheduled, while time-independent route selection allows choosing routes that may violate transport agreements. We find with the mathematical models that there are no benefits to the actors from improved information sharing alone. When extra flexibility is added, there are differences from improving information sharing, though the impact is limited. Both shifting and route selection cause a one truck reduction in weekly truck usage. However, only when adding route selection flexibility is the truck reduction a result of increased information sharing. Lastly, allowing both shifting and route selection flexibility is very beneficial for the wholesaler, as a cost reduction of 14.8 % is achieved. For the transport company, however, there is a negative effect as the number of necessary trucks increases up to two, depending on the information sharing case. In conclusion, from our two mathematical models, we find that the increase of information sharing does not give any potential benefits, but it might when adding flexibility and simultaneously aligning the actors' incentives.