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SUPPLY CHAIN COLLABORATION FOR ENSURING RETAIL PRODUCT

AVAILABILITY AT GLAXOSMITHKLINE

Meinar Dyan Muslimah

School of Business and Management, Bandung Institute of Technology, Bandung 40132
Indonesia, E-mail: meinar.dyan@sbm-itb.ac.id

Togar M. Simatupang
School of Business and Management, Bandung Institute of Technology, Bandung 40132
Indonesia, E-mail: togar@sbm-itb.ac.id

ABSTRACT
The growth of pharmaceutical industry in Indonesia combined with growth of modern retail
leads GlaxoSmithKline, as one of the largest pharmaceutical multinational corporation faces
the increasing of demand uncertainty. During year 2013, average order fulfillment by APL
warehouse was 81% and resulting average 16% stock out in Jakarta and West Java PT
Bisnis Retail outlet. This research aims to develop a process simulation model for
determining the best possible business solutions to decrease retail out of stock by improving
supply chain collaboration amongst GlaxoSmithKline, APL, and PT Bisnis Retail in retail.
Actual data of demand and supply in 2013 was used to modeling existing system. Root
cause analysis showed that root causes were: set low minimal stock retail outlet, adjust
purchase order without information sharing, several payment that not paid right on the time,
human error or local fraud, and unresponsive discussion of control result. The possible
solutions that have been made are: set higher minimal stock in outlet, forecast updates
sharing using sharing information system, 100 % on time payment, perform new regulation
for SKU control system, and Intensive control result evaluation in managerial level with
virtual meeting. Purposed solutions were examined using Monte Carlo simulation with
result 82% of order fulfillment and 10% of retail out of stock.

Keywords: Supply Chain Collaboration, Pharmaceutical Product Distribution, Order

Fulfillment, Stock Out, Monte Carlo Simulation, GlaxoSmithKline.

1. INTRODUCTION
Retail industry in Indonesia had been developing since early 20th century and had occupied
important role in Indonesian supply chain business. There are two types of retailer: traditional and
modern. The modern retailer outlets sometimes face the issues of out of stock. That situation
brings negative effect to supplier and retailer: when a patronage product does not available,
customers would buy another product or buy similar product but in other retailer. Therefore,
product availability is necessary to avoid loss of sale. It occurs also in the pharmaceutical industry
which involves manufacturers and distributors which using external retailers (Gautrin, 2002).
A pharmaceutical company, called GlaxoSmithKline (GSK), one of distributor, named PT
Bisnis Retail, and APL as third party logistic were involved as a case study. During year 2013 in
Jakarta and West Java (Jak-West), the average order fulfillment by APL warehouse to PT Bisnis
Retail distribution center was only 81% and was resulting unbalance inventory in PT Bisnis Retail
distribution center. Therefore, order fulfillment by PT Bisnis Retail distribution centers to PT
Bisnis Retail outlets was resulting average 16% out of stock in PT Bisnis Retail outlet Jak-West.

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The research is organized by several sections. The next section reviews previous literatures
about product availability situation which could leads firm into out of stock, and several solutions
based on supply chain collaboration. It is then followed with a section discussing on the research
method in which a brief description about the company, data collection, measurement and analysis
are presented.

2. LITERATURE REVIEW
Product availability is the amount of inventory that is available to sell during specified
time period (Jones and Chung, 2008). Specifically, Product availability is well defined: goods are
either in-stock or not according to (Conlon and Mortimer, 2012). The ability to support high levels
of product availability provides greater customer demand responsiveness but increase costs
because inventory has to be held with no prior commitment or order and oftentimes this excess
inventory is held but rarely used according to (Jones and Chung, 2008). In contrast, a low level of
product availability provides reduced inventory holding cost but may result in customer failure
and loss of current and future sales (Jones and Chung, 2008). Product availability is critical to all
members of supply chain (Coyle et al., 2009). Low level of product availability could definitely
cause out of stock. Out of Stock or OOS referring to whether the product was or was not on the
shelf, store, distribution center, warehouse, or in the manufacture which cause a failure of a salable
condition (Gruen and Corsten, 2007). There are several undesired effects caused by OOS: loss
sales, service failures, brand substitution, distort forecast, and distort inventory information for
ordering and replenishment. The worldwide average level of OOS in FMCG retail industry occurs
about 8 % and was costing billions every year (Gruen and Corsten, 2007). One of OOS solutions
is Efficient Consumer Response. Efficient Consumer Response (ECR) defined as working together
to fulfill consumer wishes better, faster and at less cost (King and Phumpier, 1996). The Efficient
Consumer Response (ECR) concept was introduced in 1992 as a result of competition from
alternative store formats which highlighted major inefficient within the supermarket industry and
its supply chain. In order to survive, the US grocery industry leaders formed a task of the study to
transform information within supply chain faster and more accurate (Pedro and Bhutta, 2005).
Supply chain consist of all parties involved, directly or indirectly, in fulfilling a customer
request including manufacturer, suppliers, transporters, warehouses, retailers, even customers
themselves (Chopra and Meindl, 2013). Complete supply chain may consist of different
companies with different objectives in each stage which often conflicting interest amongst the
member of supply chain (Chopra and Meindl, 2013). Supply chain collaboration improves if all
stages of the chain to share information and take actions that are aligned and increase total supply
chain surplus (Chopra and Meindl, 2013). With collaboration, company can leverage each other
on an operational basis so that together they perform better than they did separately (Coyle et al.,
2009). One of the supply chain collaboration processes is CPFR (Collaborative Planning,
Forecasting and Replenishment). CPFR becomes the key essential process to begin optimizing the
supply chain (Sheffi, 2002). The goal of CPFR is to change the relationship paradigm and create
more accurate information to greater sales. In the previous research, that had been reported in
Business Week that Wal-Mart and Warner Lambert attained significant improvements of in-stock
positions while reducing inventory through collaborative planning, forecasting, and replenishment
(Verity, 1996). One of the main differences between CPFR and other collaborative arrangements
is that under CPFR, both parties are informed of exceptions, which generate the collaborative
activities aimed at resolving these exceptions.
The next level of supply chain collaboration is partnership. A partnership is a tailored
business relationship based on mutual trust, openness, shared risk and shared rewards that results
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in business performance greater than would be achieved by the two firms working together in the
absence of partnership (Simchi-Levi et al., 2008). Partnership gives lots of benefits such: adding
value to products, improving market access, strengthening operations, adding technological
strength, enhancing strategic growth, enhancing organizational skills, and building financial
strength. Partnership not only creates supplier-retailer collaboration but also to includes third
logistic party. Third logistic party or also known as 3PL which began in 1980s refers to outside
company to perform all or part of the firm’s material management and product distribution
functions such as trucking, warehousing, and sometimes handle transaction account for enhance
sales distribution performance (Simchi-Levi et al., 2008).

3. RESEARCH METHOD
This Research conducted for measuring the retail out of GlaxoSmithKline stock in PT
Bisnis Retail outlet in Jak-West as unit of analysis. Inventory level in PT Bisnis Retail outlet Jak-
West, PT Bisnis Retail Distribution Center Jak-West, and APL regional warehouse Jak-West were
main actor of analysis, which overlooked the supply chain collaboration process from warehouse
until retail store in product flow as the level of analysis.
There are five stages used in this research: data collection, definition stage, diagnosis
stage, design stage, and delivery stage. The types and techniques of data collection including
primary data collected through interview each business performed by GSK as supplier, APL as
third logistic party, and PT Bisnis Retail as distribution center also retailer via direct interview and
mobile phone as primary source to gain qualitative data, also email to gain quantitative data as
secondary source such business documents and records. Interview and intensive follow-up with
Key Account Manager of GSK which responsible in Jakarta-West Java area, PT Bisnis Retail
Buyer in Bandung, and Bekasi, also APL Project Manager for GSK which had already conducted
since January 2014 until June 2014. Several questions and verification proved by several
document gathering had already conducted about company brief explanation, business process,
undesired collaboration situations situation which leads to out of stock, and possible solution
required in collaboration process. Interview had been conducted in twice a month in average with
no longer than three hour.
After data collection is definition stage which researchers analyzed the business process
and situations within the company to find the root causes of the symptom by analyzing business
process. Diagnosis Stage is to identify symptom and seek the causes of the current business issues
using business process analysis and root cause analysis to seek of the root cause. The existing
model was tried based on the data collected from Monte Carlo simulation (Andini and
Simatupang, 2014). After ensuring that the existing data for modeling had mimicked the existing
system, a root cause analysis was conducted. Monte Carlo simulation had already conducted to
solve the problem occurred. Three times a week demand from each regional distribution center of
PT Bisnis Retail in Jakarta-West Java with random number had distributed as the actual data.
Average of lead time was fixed which obtained from interview and assume there was no
backorder. The production capacity is assume that always fulfill the demand of headquarter
warehouse. Monte-Carlo simulation had already conducted to simulate proposed solutions to
gather the final result of 6 month collaboration condition performed by proposed solutions. Monte
Carlo simulations presented as 1 APL regional warehouse, 2 PT Bisnis Retail distribution center
with 3 PT Bisnis Retail local outlets in each distribution center. In the other words, there are six
PT Bisnis Retail local outlets as the representative. Design Stage is to determine proposed
business solutions based on the root cause analysis. Afterwards, the conclusions were drawn, and
recommendations were presented for the company to improve its performance.
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4. GLAXOSMITHKLINE, APL, AND PT BISNIS RETAIL

GlaxoSmithKline (GSK) is the one of the world's leading research-based pharmaceutical
and healthcare companies. GSK based in Brantford, London, England and established in 2000
operating in 70 countries and employs about 100,728 workers. GlaxoSmithKline Indonesia is
pharmaceutical industry which contains three big business departments: pharmaceutical, consumer
healthcare, and manufacture. GSK Indonesia sells and distributes this kind of products in huge
area which divided into two divisions’ focus of distribution channel, they are: General Trade: local
pharmacy, traditional market, and traditional store; and Modern Trade: minimarket and
hypermarket. The overall duties of modern trade division are: planning and targeting with internal
and external party, executing, and controlling all product chain from warehouse until retailer to
achieve sales target to customer which is distributor, not end consumers.
APL is the world's seventh largest ocean carrier, offering more than 80 weekly services
over 500 calls at more than 140 ports worldwide. APL provides container transportation and value
added supply chain management services through the international shipping network. With over
160 years of experience, APL has the knowledge and the expertise to help our customers grow
their businesses and negotiate in an increasingly complex and ever-changing global marketplace.
APL Indonesia established itself in 2001. APL has an extensive network of offices in Indonesia in
the city of Bandung, Jakarta, Medan, Palembang, Padang, Semarang and Surabaya and agency
relationships in Bali, Banjarmasin and Makassar. Today, APL is one of the biggest names in
container shipping in Indonesia and plays a vital role in supporting global trade and commerce in
this country.
PT Bisnis Retail is one of retail business operated and executed over Indonesia for almost
30 years. With the knowledge and skills to operate a large-scale retail network, the management is
committed to turn PT Bisnis Retail into a national asset operated by 100 % of excellent
Indonesians. PT Bisnis Retail had already own 8,348 retail outlets with more than 1,000 SKU
(Stock Keeping Unit). PT Bisnis Retail has a role as the biggest distributor and retailer over a lot
of companies operated in Indonesia.

4.1. Business Process Analysis

GlaxoSmithKline had already collaborated with PT Bisnis Retail to distribute its products
and supported by APL since 2002. In collaboration, GlaxoSmithKline and PT Bisnis Retail has
annual contract called trading term that stated about promotion target budget, fix rebate,
promotion budget allocation by product, location, and program, such as mailer, discount,
bundling, and display rent for 17 SKU of GlaxoSmithKline products. Even PT Bisnis Retail just
selling 20.5 % GlaxoSmithKline SKU, PT Bisnis Retail has the biggest sales contribution
compared with all modern trade channels over Indonesia in 2013 which is 24%. This research
focused in Jakarta and West Java distribution center because this territory has the biggest sale over
Indonesia which is 65% but contribute the highest of out of stock rate over Indonesia which is
19%. Each of GlaxoSmithKline, APL, and PT Bisnis Retail has different organization structure,
role, and responsibilities to support the collaboration process.
GSK which has role as supplier has duty to research, produce, market, and sales the
product to retailers such as PT Bisnis Retail. APL is third party logistic who distribute the
products by offering transportation facilitations, warehouse, and receiving purchase order account
which about 5 APL in Jak-West area. PT Bisnis Retail is Retailer who own about 9 distribution
centers in Jak-West area has to distribute the products from distribution center to about 4006 retail
outlets over the Jak-West areas also sells the product directly to end consumer.

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During 2013, order fulfillment by GlaxoSmithKline and the number of stock out by
regional distribution center of PT Bisnis Retail showed unsatisfying results. The order fulfillment
was 81 %. In the other words, of all Jakarta-West Java distribution center of PT Bisnis Retail, ~16
% experienced stock-out. From these findings, a more deeply analysis was conducted in the next
part. Figure 1 and Table 1 show the order fulfillment and the number of the stock-out in PT Bisnis
Retail distribution center of Jakarta-West Java region during 2013.

Figure 1. Order fulfillments by APL for Jak-West PT Bisnis Retail distribution center in 2013

Full complete which is 81 % refers to condition that APL could send entire order quantity
directly. Partial Complete which is 12 % refers to the conditions that APL only could send partial
of order quantity. Reject Stockout which is 5 % refers to totally stock out inventory. Reject others
which is 1 % refers to the conditions that APL logistic resource could not meet the need. Reject
finance which is 1 % refers to the expired payment from PT Bisnis Retail.

Table 1 . Number of the stock out of Jak-West PT Bisnis Retail outlet in 2013

Number Quarter 1 Quarter 2 Quarter 3 Quarter 4 Average Target

of The 18.06% 17.31% 15.77% 13.85% 16.25% 0%
Stock
Out

Order fulfillment is a key process in managing the supply chain (Croxton, 2002). It is the
customers’ orders that put the supply chain in motion, and filling them efficiently and effectively
is the first step in providing customer service (Croxton, 2002). The order fulfillment for the year
2013 was far from the target set. With low order fulfillment, GlaxoSmithKline experienced stock-
out in PT Bisnis Retail outlet. Therefore, GlaxoSmithKline should take actions to fix this problem.

4.2. Root Cause Analysis

The cause map analysis was created based on the interviews, existing modeling, and
explanation of the business process. The analysis shows that GlaxoSmithKline experienced 81%
order fulfillment, which is 16% of retail outlets’ frequent stock-out average. After analyzing the
existing models, the following causes can be concluded.

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Cause Map Analysis

GlaxoSmithKline PT Bisnis Retail APL
Symptom Retail outlet out of stock 16%

There is no responsive
KAE receive report but not do controlling and improvement in
responsive discussion with PT retail outlet
Bisnis Retail

Controlling
MD reports the evaluation to KAE and do evaluation action right on
inspection time in retail outlet

MD found human error and local There is human error or local

fraud in retail outlet fraud in retail outlet

Receive product in DC with only Purchase order full

81% full complete complete (81%)

There is not on time payment Receive the payment

Executing

Release purchased order Receive purchased order

which different with sales
forecast
Adjust several purchased order
without information sharing

Set low minimal stock in retail

outlet
Receive monthly forecast
Planning and all GSK requirements
Conduct trading term as strategy to achieve sales target in distribution

Set sales target, forecast, and strategies solve the market issues for 1 year

Figure 2. Root cause in collaboration process map analysis

The root causes that had been found are: set low minimal stock retail outlet, adjust
purchase order without information sharing, several payment that not paid right on the time,
human error or local fraud by un-strict system, and unresponsive discussion of control result
which leads to 16% retail OOS and 81% full complete-order fulfillment.

4.2.1. Set Low Minimal Stock Retail Outlet

There are 17 SKUs of GSK products which sold in PT Bisnis Retail outlet. The outlet does
not have enough warehouse space to stock all of SKU. There are several products will only be

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placed on display. Limited space makes retail outlet could not order to stock more to anticipate
surge in demand then meet the demand. At the end, this condition occurs retail out of stock.

4.2.2. Adjust Purchase Order without Information Sharing

There are conditions which make purchase order was different with sales forecast which
had already conducted together. Retailer anticipates occurred problems with change the forecast
and create safety program. Unfortunately, sometimes that change had not been discussed with
GSK. This condition occurs because PT Bisnis Retail release purchase order in average of Jakarta
– West Java region is three times a week, while meeting with GSK conducted twice a month.
These conditions definitely decrease product availability because there are probabilities when
retailer giving purchase order, the product is not available in warehouse because of bullwhip
effect.

4.2.3. Several Payment that Not Paid Right on the Time

APL will send the invoice to PT Bisnis Retail in maximum 4 days after the product had
already received by PT Bisnis Retail which is maximal 3 days after receiving purchased order.
The maximum period of PT Bisnis Retail to accomplish the payment is 30 days. Otherwise, the
next purchase order will be rejected by APL because of finance administrative, or called reject
finance. This system conducted as preventive action of APL receives more bad account receivable.
Occurrences of this situation causing unbalance inventory in PT Bisnis Retail Distribution Center
and also in APL warehouse because the product do not flow as the plan.

4.2.4. Human Error or Local Fraud by un-strict system

There are a lot of human errors occur in retail outlet which are done by sales person or
store manager, intentional or unintentional such as: pricing, ROP, displaying, and promotions do
not fully applied by retailers, so suppliers had to invest a lot in merchandiser to control their
products which is not fully effective because control frequency of one store only every week.
Whether the fault had not been detected within one week, it will decrease product availability.

4.2.5. Unresponsive Discussion of Control Result

The evaluation and control conducted by GSK usually do not socialize immediately to PT
Bisnis Retail management level. Meanwhile, the condition in retail outlet is very sensitive,
therefore the problems that occurred need to solve immediately not just direct in retail store but
also in management system. That situation caused miss-communication of two parties because the
internal retail outlet problem such as fraud or fault do not noticed by managerial level. Afterwards,
there will no internal improvement of that undesired situation. Consequently, only receiving
external controlling would not solve the undesired situation in effective.

5. RESULTS
After captured the root cause and gathering information about solution idea by
interviewing case study actor, the solution map can be concluded in Figure 3.

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Solution Map
GlaxoSmithKline PT Bisnis Retail APL
Symptom Retail outlet out of stock 10%

Intensive and collaborative

Intensive control result controlling and evaluating in
communication and discussion in retail outlet
managerial level

Controlling
MD reports the evaluation to KAE and do evaluation action right on
inspection time in retail outlet

MD found human error and local Perform new regulation for SKU
fraud in retail outlet control system in retail outlet

Receive product in DC with 82% Purchase order full

full complete complete (82%)

100 % on time payment Receive the payment

Executing
Release purchased order Receive purchased order
which different with sales
forecast

Intensive forecast update sharing using sharing information system

Set higher minimal stock in

retail outlet
Receive monthly forecast
and all GSK requirements
Planning in distribution
Conduct trading term as strategy to achieve sales target

Set sales target, forecast, and strategies solve the market issues for 1 year

Figure 3. Solution map

The possible solutions were generated to answer the problems that had been stated
previously. The result that had been proved in Monte-Carlo simulations provides better order
fulfillment which is 82 % and lowest stock-out which is 10 % as expectation. There are five
possible solutions: set higher minimal stock in outlet, intensive forecast updates sharing using
sharing information system, 100 % on time payment, perform new regulation for SKU control
system, and the last solution is Intensive control result evaluation in managerial level with virtual
meeting.

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5.1. Set Higher Minimal Stock in Outlet

PT Bisnis Retail only stock one carton of each SKU, which is only the product that
displayed on selling display. This condition is causing un-readiness in meeting very high demand
in this unstable demand of real situation. This solution performs the higher minimal stock of GSK
product in PT Bisnis Retail adjusted with demand and market situation periodically.

5.2. Intensive Forecast Updates Sharing Using Sharing Information System

Forecast updates sharing by using demand data from distribution center by GSK and PT
Bisnis Retail only performed twice a month by live meeting in PT Bisnis Retail Distribution
Center Office which less intensive. In fact, PT Bisnis Retail had already established a website
contains useful information through collaboration process but in charge to buy the password to log
in the website but GSK does not take that option. This Sharing Information System contains a lot
of useful information for supplier to adjust with PT Bisnis Retail, such as: Brand Contribution,
Service Level, Selling In, and Selling Out.

5.3. 100 % On-Time Payment

PT Bisnis Retail could not meet 100 % financial administration while releasing purchased
order in 2013. This situation causing the purchased order is rejected by finance and the order
fulfillment could not meet 100 % as expected. PT Bisnis Retail has to stricter the regulation of
financial administration reinforced with award and punishment system, therefore PT Bisnis Retail
would not miss any bill addressed to PT Bisnis Retail.

5.4. Perform New Regulation and SKU Control System

There is lot of human error and fraud occurs in PT Bisnis Retail Outlets. There are some
products intentionally changed in display proportions, or unintentionally displayed in undesired
conditions such as the cleanliness, tidiness, price, bundling, promotion sign, and minimal quantity
on retail warehouse. PT Bisnis Retail should develop new regulation of control system for retail
outlet to check all SKU, compare the real situations with computer data, and report it regularly to
their superior position whether there is undesired condition occurs. Therefore, this new regulation
has to be supported by clear reward and punishment system which conducted regularly.

5.5. Intensive Control Result Evaluation in Managerial Level in Virtual Meeting

PT Bisnis Retail Buyer in distribution center do not allowed any supplier to meeting except
in live meeting which leads to un-intensive collaboration. The final result is, not all problems
could be solved together immediately. PT Bisnis Retail and GSK could use existing technology
such as live messenger, video call, or e-mail with strong commitment of responsive
communication. Therefore PT Bisnis Retail could receive the report and improve its internal
system to enhance the performance in product availability.

Table 2 . Simulation results

Performance Before After Result

PT Bisnis Retail Out of Stock
Stockout Average 16% 10% Decrease -37%
PT Bisnis Retail Inventory Level
Minimal Stock Average 27 28 Increase 5%
Ending Inventory Average 18 20 Increase 9%

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APL Inventory Level

Minimal Stock Average 180 189 Increase 5%
Ending Inventory Average 245 253 Increase 3%
APL Order Fulfillment
Full Complete Average 81% 82% Increase 1.2%
Partial Complete Average 12% 9% Decrease -21%
Reject Stock Out Average 5% 8% Increase 60%
Reject Finance Average 1% 0% Decrease -100%
Reject Others Average 1% 1% Same

Table 2 shows the before and after condition of collaboration process affected by proposed
solutions. Previous condition of simulation performed approximates the real condition of
collaboration process in 2013 with 16 % average retail out of stock. All result is calculated by
averaging all events occur compared with all conditions. Then, the after condition is performed
with proposed solution with 10 % retail out of stock at the result.
The final result of this inventory level is allowed by PT Bisnis Retail. The proposed
solution which is set higher minimal inventory is performed based on demand and improves
periodically, not simultaneously and did only to certain SKU which need most to increase of
inventory level. This result also impacts to APL warehouse inventory level. This improvement had
already approved by APL and GSK because of few increasing of inventory level rather than the
impact of decreasing of retail out of stock and improvement of collaboration performance. The
possible solutions that have been made will be implemented into the operational level of the
company also could called as new commitment system because all solutions could not be perform
well whether there is no full commitment of all related company. There are three phases to
implement these business solutions effectively and efficiently leads to 100 % expected output,
they are preparation, implementation, and evaluation.
In preparation phase, socialization and commitment building to perform intensive and
responsive virtual meetings are conducted. PT Bisnis Retail, GlaxoSmithKline, and APL have to
commit to conduct internal and external commitment. Supplier service includes the building trust,
intensive report, discussion, and caring about the product in its retail outlet has to be performed by
PT Bisnis Retail. New human resource policies also have to be performed in order to enhance
employee performance and discipline especially in SKU control system and payment system in
order to avoid any human error. This commitment has to be performing continuously to build
sustainable improvement in new culture, discipline culture. All improvement on preparation phase
performed in order to support new minimal stock regulation and SKU control regulation which
also improved in this preparation phase.

6. CONCLUSIONS
The business issue is about the product availability, concern to retail out of stock which
influenced by collaboration process in conduct mutual decision, purchased order, and order
fulfillment. The root causes that had been identified were set low minimal stock retail outlet,
adjust purchase order without information sharing, several payment that not paid right on the time,
human error or local fraud, and unresponsive discussion of control result that had been verified by
Monte Carlo modeling and simulation of existing collaboration process with 16 % retail out of
stock and 81 % order fulfillment as the results. To overcome the emerging root causes, several
possible solutions were made by using the solution maps. The possible solutions that have been

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made are: higher minimal stock in outlet, intensive forecast updates sharing using sharing
information system, 100 % on time payment, performs new regulation for SKU control system,
and the last solution is Intensive control result evaluation in managerial level with virtual meeting.
The business solutions were then run under Monte Carlo simulation with proposed solution
combined with existing random number that had already faced by existing modeling. Proposed
solution scenarios are predicted to be able to meet 82% order fulfillment and to achieve both the
lowest stock-out which is 10 %.
Further research is required to improve a company’s performance and to minimize its
performance cost. Henceforth, the proposed solution can be extended to jointly develop the
collaboration process in replenishment planning activities in higher performance level or wider
divisions within the companies such as marketing, human resource, and finance. The further
research also required to research other factors which affects collaboration process in different
outputs and inputs such as includes sales and lead time effect for the output and includes financial
aspects, and customer behavior as the input of research.
The contribution of this research is the application of supply chain collaboration process
across supplier, third logistic party, and retailer that are involved in planning, forecasting, and
controlling to improve the company’s performance. The present research will complement
previous research because it studies the replenishment and distribution policy that are more
complete than the research done by Bottani et al. (2012), who only studied a periodic review
policy without information sharing in supply chain collaboration but also give improved
replenishment system. Using demand and inventory information sharing in this present research
will also complement the research done by Ohta et al. (2009), who only studied the inventory
sharing from the downstream partners. Increase production capacity, improved and updated
forecasting method, and using new inventory management policy which completed by Gunawan
and Simatupang (2014).

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