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

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.