ENABLING SUPPLY CHAIN RISK MANAGEMENT BETWEEN MANUFACTURING FIRMS AND LOGISTICS SERVICE PROVIDERS

• Main Author: Arfianda Imran, Jovanska
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/72599
• Institution: Institut Teknologi Bandung

The implementation of lean management (i.e., just-in-time) in companies has made logistics plays a crucial role in efficiently managing the flow of goods. In Indonesia, logistics processes are complex due to geography and infrastructure challenges, posing risks to manufacturers that rely on logistics activities. The trend of using logistics service providers (LSPs) by manufacturer has resulted in in a lack of visibility into their logistics activities managed by the LSPs, thereby exacerbating their logistics risks. Previous studies have developed supply chain risk management (SCRM) that focuses on collaborative efforts, which is more effective in handling risks. However, how collaboration schemes enable SCRM remains understudied. Therefore, this study aims to identify the collaboration features required for SCRM process between manufacturers and LSPs in logistics activity and investigate whether the use of collaboration features in SCRM process can reduce the severity of logistics risks. For the first research objective, a case study in an automotive manufacturing firm and an automotive LSP were performed. The data was collected through interviews with logistics experts in the company. Meanwhile, the second research objective was addressed by conducting simulation using Agent- Based Modeling (ABM). The simulation was performed for four different scenarios which were differentiated in the initial degree of willingness to collaborate in the SCRM process. This study identified five collaboration features that can be used for SCRM between manufacturers and LSPs in logistics activities, including information sharing, decision synchronization, incentive alignment, integrated supply chain process, and collaborative performance systems. The simulations using ABM showed that these collaboration features can reduce the severity of logistics risks, especially when there is a high initial willingness to collaborate. This study contributes to the theory by identifying how companies can collaborate to improve risk management. It also recommends companies to invest in long-term partnerships to strengthen trust with their partners.