The impact of Collaborative Transportation Management on supply chain performance: A simulation approach

Collaborative Transportation Management (CTM) is based on the interaction and collaboration between trading partners and carriers participated in the supply chain, appropriate application of CTM can improve the flexibility in the physical distribution and minimize the inefficiency of supply chain management. This paper proposes new concepts of CTM and carriers’ flexibility. A simulation approach is used to (i) evaluate the benefits of the proposed CTM, (ii) explain the concept of carrier’s flexibility, and (iii) optimize the delivery speed capability. Based on a simple supply chain including one retailer and one carrier, three different simulation models have been developed with changeable delivery lead time as follows: (1) Unconstrained delivery speed capability without CTM. (2) Constrained delivery speed capability without CTM; and (3) Constrained delivery speed capability with CTM. Simulation results reveal that CTM can significantly reduce the retailer’s total costs and improve the retailer’s service level.