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

2.7.1 Scenario: Advanced Logistics Partnership (ALP)

Intended learning outcomes: Identify examples of local sourcing with world-class local suppliers (a feature of the ALP model). Disclose and analyze the situation of three companies making up a supply chain for processing a particular kind of timber, which grows in a particular region.

Problem a: Figure presented arguments for the emphasis on local networks (local sourcing with world-class local suppliers) that is a feature of the ALP model. Do you know of any companies (including some in the service industry) that follow this principle? Do some Internet research and find out whether these companies address the issue of local sourcing on their Web sites

Problem b: A supply chain processes a particular kind of timber with special qual­ities, which grows in a particular region. The following companies make up the supply chain: (1) a lumber mill with various forest owners as potential suppliers, (2) a wood planing mill, and (3) a company that provides surface treatments and finishes and handles distribution. For the wood planing mill, how would you take into consideration and cope with the following risks involved in forming this supply chain:

  • There is a risk that the lumber mill could be bought out by a paper factory that requires the entire production for its own use. (Hint: Compare this situation with Sections 2.2.2 and 2.3.1.)
  • Storms could cause widespread destruction of the forests, resulting in a sharp rise in the price of this type of wood on the free market. (Hint: Compare this situation with the argumentation on “trust-building measures in partnership relationships” presented in Figure

Course section 2.7: Subsections and their intended learning outcomes