Collaborative capacity sharing among manufacturers on the same supply network horizontal layer for sustainable and balanced returns

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Abstract
To deal with volatile demand and rapidly changing manufacturing technologies for sustainable returns, as a solution, collaborative capacity sharing (CCS) among manufacturers at the same horizontal layer in supply networks is discussed in this research, especially focusing on a long-term aspect. Such horizontal collaboration can minimise manufacturers’ lost sales, as well as maximise their production capacity utilisation in a long-term period against lumpy demand. Hence, to help manufacturers determine whether and with whom they have to collaborate a CCS protocol based on a theoretical analysis is developed. It is a distributed decision protocol suggesting an effective coalition for each manufacturer. Furthermore, for well-balanced distribution of resulting profits to each manufacturer, two procedures are proposed: (1) determination of appropriate substitution production cost and (2) bids among manufacturers/coalitions. To evaluate the effect of those processes, two types of CCS protocols are designed – CCS-(1) and CCS-(2); only CCS-(2) performs those procedures. A numerical experiment is conducted to compare the performance of four models: No collaboration, complete collaboration, and two types of selective collaboration by CCS-(1) and CCS-(2). The performance of CCS-(2) is at least equal to or better than other models with higher and balanced returns.

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