Adaptive direct/indirect delivery decision protocol by collaborative negotiation among manufacturers, distributors, and retailers

Recently, as the dynamic nature of supply networks increases, the importance of adaptive design, planning, and management becomes more emphasized. Especially, as the complexity of interacted distributed operations increases under changeable conditions, it becomes a key issue to design the adaptive collaboration strategy considering the multiple network participants׳ economic goals and interdependent factors that affect/restrict their viability. Hence, this paper addresses one of related supply network problems-an adaptive direct/indirect delivery by using appropriate collaboration to deal with changeable conditions. We have developed a Direct/Indirect Delivery Protocol (DIDP), which aids to model physically and economically viable collaboration strategies and provides effective delivery schedule under changeable conditions. This decision protocol is designed based on Collaborative Control Theory (CCT), and includes Delivery Plan Generation sub-protocol (DPGsp) for delivery pattern estimation and optimization process. To evaluate its performance, a numerical example is conducted; it results in accommodating to external changes well with 55% increase in the resources utilization ratio and 20% reduction in the total physical distribution cost, compared to original delivery pattern.