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All Journal Journal of Engineering and Management in Industrial System Jurnal Ekonomi dan Bisnis Islam OPERATION EXCELLENCE: Journal of Applied Industrial Engineering
Winda Narulidea
Universitas Internasional Semen Indonesia
Decision Sciences, Operations Research & Management Economics, Econometrics & Finance Industrial & Manufacturing Engineering

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Journal : Journal of Engineering and Management in Industrial System

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MODELING SUPPLY CONTRACTS TO MANAGE OUTSOURCING RISKS OF LOGISTICS' ACTIVITIES Winda Narulidea; Sekarsari Utami Wijaya
Journal of Engineering and Management in Industrial System Vol 6, No 2 (2018)
Publisher : Badan Penerbit Jurnal, Faculty of Engineering, Universitas Brawijaya

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21776/ub.jemis.2018.006.02.6

Abstract

Many companies managed to improve logistics performance by making outsourcing decisions on logistics activities. The use of logistics outsourcing, not only can maintain their focus on core businesses, but also continue to minimize distribution costs by establishing relationships with third party service providers to create value of their operational performance excellence. But in a decentralized supply chain condition, the control of the supply chain players towards third-party logistics service providers is also limited, while the performance of logistics services affects the availability of products, quality, price, and market share of these companies. Coordination mechanisms are needed in a decentralized supply chain, especially with the implementation of logistics outsourcing decisions, so companies can maintain competitive advantage. In this paper, the model revenue and inventory-risk sharing contract was developed to coordinate the supply chain consisting of manufacturers, third party logistics service providers, and retailers. In addition, incentive and penalty schemes are applied based on the performance of logistics service providers that will affect the level of availability in retailers, so that inventory risk can also be allocated to all stakeholders.
REVENUE SHARING CONTRACT AS COORDINATION MECHANISM WITH THE IMPLEMENTATION OF LOGISTICS OUTSOURCING IN DECENTRALIZED SUPPLY CHAIN Winda Narulidea; Artya Lathifah
Journal of Engineering and Management in Industrial System Vol 5, No 2 (2017)
Publisher : Badan Penerbit Jurnal, Faculty of Engineering, Universitas Brawijaya

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (412.898 KB) | DOI: 10.21776/ub.jemis.2017.005.02.4

Abstract

By making logistics outsourcing decision, companies have been able to improve the logistics performance, maintain focus on core business, and minimize distribution cost. However in decentralized condition, there is only limited control of the third party logistics service provider (TPLSP), whose logistics service performance affect the products availability, quality, price, and market share. In this research, a model is developed as coordination mechanisms with the implementation of logistics outsourcing in decentralized supply chain. Revenue sharing contract model is developed in the proposed model to coordinate the supply chain consisting of manufacturers, TPLSPs, and retailers. Moreover the incentive and penalty scheme are implemented in accordance to the supply chain logistics service performance, so the risks and the necessary costs could be allocated to all players. To increase the desirability level of the contracts for all players, the contracts parameters are determined so that all players could obtain higher profit than in a common decentralized supply chain conditions, furthermore the win-win condition can be achieved. This paper provides new model of coordination mechanism in supply chain with logistics outsourcing and offers the incentive and penalty scheme into the basic model of revenue sharing contracts.
Co-Authors Artya Lathifah Artya Lathifah Faisal Riza Muhammad Eka Kurniawan Oki Anita Candra Dewi Sekarsari Utami Wijaya