A Best-Worth Method to Implement Bi-lateral Contracts with Essential Barriers

In some bi-lateral alliances, firms coordinate their interactions in supply chain management (SCM) via contracts. Although such a contractual approach is common in the community of SCM both in industry and academia, successful implementation of contracts in bi-lateral alliances remains challenging in practice because of the incomplete identification of implementation barriers by firms involved in the alliance. This paper investigates the implementation issues of bi-lateral contracts. To identify the barriers, the literature and interview experts of the subject matter are reviewed. By adopting the novel “best-worst” prioritization method, we evaluate the main barriers firms face in the successful implementation of contracts discovered in our identification phase. To validate the findings, a list of barriers is applied to assess a set of firms in the Iranian auto industry and locate more prepared firms as future partners of potential bi-lateral alliances. The results are consistent with the common intuition toward these sample firms in the case study.