Strategies for Reducing Collaboration Disruption Risk between Logistics

Collaboration between logistics provider and manufacturer is the necessary condition to improve the overall competitiveness of a supply chain. However, collaboration disrupts from time to time due to poor weather, natural and man-made disasters, or a combination of any other factors. The unplanned disruption can cause a production delays, the cost leaps, and even the company bankrupts. The purpose of this paper is to examine the use of strategies to reducing risks, which may lead to a collaboration disruption between logistics provider and manufacturer. Based on the related mathematical theory and the theory of economics respectively, this paper develops a model that can be used to identify the response that can lead to obtain optimum results for logistics provider and manufacturer. Based on the model, managers for both sides can develop appropriate strategies for reducing risk exposures in the event of a collaboration disruption.