A note on supply risk and inventory outsourcing

This paper is aimed at developing and testing a methodology to evaluate the most appropriate collaboration level within a given supply chain. In particular, the proposed methodology is conceived for logistic networks belonging to the consumer packaged goods industry, e.g. the grocery industry, and it consists of: (i) identifying an approximation of collaboration, (ii) representing through such approximation the different options among collaborative planning forecasting and replenishment (CPFR), vendor management inventory (VMI) and loosely collaborative approach (LCA); (iii) using a simulation-based decision support system to select the best collaboration level. The proposed methodology has been applied to a real-life supply chain in the food and beverage industry. Results conclude that the methodology proposed here proved useful in facing the problem of collaboration level definition among the nodes of a consumer packaged goods logistic network.