Implementing Environmental and Social Responsibility Programs in Supply Networks Through Multiunit Bilateral Negotiation

Involving suppliers deep in the supply chain is critical for the success of environmental and social responsibility (ESR) initiatives. Administering ESR programs throughout a complex supply network, however, is challenging. In this paper, we apply a multiunit bilateral bargaining framework to coordinate ESR investments in a general supply network and analyze to what extent an ESR initiator should directly engage the higher-tier suppliers as opposed to delegating that responsibility to the first-tier suppliers. Our bargaining framework not only generalizes the conventional Shapley value approach by allowing the flexibility of modeling imbalanced power distribution among the firms but also provides an explicit way of implementing the resulting gain sharing among the firms through negotiated contract terms. We show that the eventual structure of ESR negotiation relationships can be derived by finding a shortest path tree in the supply network with the arc cost defined as the logarithm of the negotiating parties’ relative bargaining power. These developments allow us to analyze ESR implementation in generally extended supply networks. We find that the ESR initiator tends to delegate ESR negotiations to a supplier that is strong in negotiations with higher-tier suppliers. When the supply network is complex (i.e., wide and deep), directly engaging all suppliers can lead to a larger gain by the initiator than fully delegating the negotiations with higher-tier suppliers to the first-tier ones. However, as the network gets increasingly complex, the ESR initiator tends to directly engage a reduced percentage of higher-tier suppliers. We further extend our analysis to situations where the ESR relationships are sequentially formed in a decentralized manner, where the benefit of ESR depends on the collective choice of the firms’ investment levels, where multiple ESR programs are implemented in the network, and where ESR investments depend on the negotiation relationships. This paper was accepted by David Simchi-Levi, operations management.

How to Share the Gains of Collaboration?

Supply chain collaborations may generate substantial cost savings. Many such initiatives cease to exist, however, due to not reaching an agreement on how to share the gains. We describe an exercise to understand the challenges in collaborative gain sharing.

The impact of a gain-sharing cost-reflective tariff on waste management cost under incentive regulation: The Italian case

In many European countries, waste tariff systems are being updated to take account of the consolidation of circular economy objectives. We forecast the impact of a gain-sharing cost-reflective tariff on waste management sustainability. The cost-reflective tariff generates an economic surplus for society, while meeting environmental goals. Based on empirical data we developed two scenarios. The baseline scenario formalizes the current Italian tariff scheme, while the intervention scenario includes users' response to a gainsharing policy. By optimizing the tariff structure, society would benefit from a surplus that could be reached setting an asymmetric regulation based on current waste management efficiency level. Our results will potentially be a basis for directing waste management policy as per tariff design

“The resource-based paradigm – a special emphasis on work- force capital as a competitive strategy in businesses”

It is a known fact that organizational strategies have created a competitive advantage of organizations. However, this competitiveness can be achieved only with the proper deployment of human, physical, and organizational resources. A study on the resource-based paradigm, specifically on human assets, explores the significance of human involvement and human investment perspective in enterprises. In view of that, a mixed approach, with a quantitative and qualitative survey was conducted in randomly selected manufacture industries in the UAE. The statistical analysis, with the help of SPSS 20 confirms the correlation between this model with its latent variables, talent management and change management, towards a strategic move. Moreover, the results prove that this RBV can enhance the mobility of various resources in the organization, maintain a culture, uphold gain-sharing, and boost network opportunities for the organizational and individual competencies.

Towards Sustainable Collaborative Logistics Using Specialist Planning Algorithms and a Gain-Sharing Business Model: A UK Case Study

This paper introduces the FreightShare Lab Platform (FSLP) and its embedded business model, aiming to facilitate and encourage horizontal collaboration in freight logistics. The idea of the FSLP is to create collaborating clusters of freight operators, and corresponding collaborative operational plans, via specialised decision support algorithms and multi-fleet optimisation. Further, a gain-sharing business model embedded within the FSLP algorithms ensures that participants, mainly logistics service providers and freight operators, can retain their own profit margins and fairly share the efficiency gains from collaboration. A case study is presented, centred on a large UK freight operator, to evaluate the key FSLP algorithms in a realistic context. The results evidence the potential for significant financial and environmental benefits for industry and society.