Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

2.3.2 The Advanced Logistics Partnership (ALP) Model, a Framework for Implementation of Intensive Cooperation in the Supply Chain

Intended learning outcomes: Produce an overview on the ALP model: a framework for implementation of an intensive cooperation in the supply chain.

A distinguishing feature of a partnership relationship is its long-term na­ture. The stability and, for a balanced relationship, also the intensive cooperation are guaranteed only if each partner perceives the situation as “win–win.” Achieving a win–win situation is the guiding principle in imple­menting a partnership. The Advanced Logistic Partnership (ALP) model[note 205] puts this ba­sic principle into concrete terms. The ALP model is a framework that descri­bes three management levels of interactions among suppliers and customers:

  • Top management level: building trust and establishing principal legal relationships
  • Middle management level: working out collaborative processes on the supply chain
  • Operational management level: order processing

ALP distinguishes among three phases in the relationship between suppliers and customers:

  • Intention phase: choice of potential partners
  • Definition phase: search for possible solutions, decision making
  • Execution phase: operations and continual improvements

Figure shows the nine fields that result from this structuring. Marked in the fields is the basic sequence of implementation of a partnership among companies.

Fig.        The ALP model: a framework for implementation of an intensive cooperation in the supply chain.

The top management level supplies the requirements for the middle level, which in turn sets requirements for the operational level. As cooperation on all levels is the key condition for the partnership, it is important to involve all participants early on. Only in this way will the consensus and team spirit, essential to trans­corporate cooperation, develop within an organization. With this, the operational and middle management levels also influence the top level, as in­dicated in the figure by means of the thin arrow. The bigger letters in the fields along the axis from the top left to the bottom right indicate that the main work is performed for the relevant activities. The top right and bot­tom left fields enclose activities mostly overlooked in practice.

In recent discussion on supply chain management, attention was shifted to the four fields at the bottom right of Figure (highlighted by dark shading). Through an integral perspective and a focus on all business processes in the supply chain, a company aims to coordi­na­te its own planning and execution with that of suppliers and customers to achieve the optimum in the entire supply chain. All the tasks are oriented toward the darkest field, at bottom right, of the nine fields in Figure coope­ra­tive order processing in the network. For that is where the value adding takes place that is of interest to the end user. In general, SCM soft­ware manages only the tasks in this ninth field. Adequate and efficient implemen­tation of IT support is a necessary, but by itself not sufficient, prerequisite for the success of all other components of supply chain management.

Course section 2.3: Subsections and their intended learning outcomes

  • 2.3.7 The Virtual Enterprise and Other Forms of Coordination among Companies

    Intended learning outcomes: Produce an overview on the virtual enterprise and underlying long-term network of potential partners. Present target area strategies for a virtual enterprise and disclose possible supply chain risks entailed. Describe some other forms of cooperation in relation to the virtual enterprise.