Collaboration and decision models for a two-echelon supply chain : a case study in the pulp and paper industry

With the current economic context, enterprises aim to improve collaboration and enhance information exchange with their suppliers or customers in order to better coordinate their activities and respond promptly to their customer. A demonstration of this trend is the development of formal collaboration models like Vendor Managed Inventory (VMI) or Collaborative Planning, Forecasting and Replenishment (CPFR) which are now used to facilitate product and information exchange between partners. However, the setup of efficient inter-firm collaborations requires time and investment with no guarantee of success or failure of the relationship. Although many of the emerging approaches are promising, the need to identify and apply the best collaboration model for the context considered remains. In this paper, we study different collaboration strategies between a producer and a retailer in the pulp and paper industry. For this industrial context, we define a methodology to analyze and compare the impact of collaboration modes on the network profit. Using a rolling horizon of two weeks and a total planning period of one year, we also proceed with numerical experiments. Our tests reveal that the CPFR method is the more gainful collaboration approach for the case studied providing up to 18% of transportation costs reduction over order-based relation