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one of the main barriers to collaboration (Barrat, 2004;
[6,7] Ireland and Bruce, 2000); 5) Asymmetric distribu-
tion of costs and benefits: since substantial investments
are needed from both sides, but the transporter realizes
less benefits, while taking on new responsibilities, risks
and a more strategic role in the process. Thus, the finan-
cial compensation plan for its services also has to be
changed from previous system that was based on number
and punctuality of deliveries to the final customer and
average inventory costs; 6) Different organizational cul-
tures and leadership styles; and 7) A new way of thinking:
since employees will have to seek solutions on the SC
global instead of local optima and learn to cooperate
closer with its supplier/buyer. Business modeling plays
the role of a facilitator of changes (Bay, Tang and Bennet,
2004; [8] Burgess, 1998; Kidd, Richter and Li, 2003).
6. Case Study & Results of a Specific Field
Based on the mentioned problems, several improvements
were proposed. The main change is that the processes at
both companies are now integrated and the supplier takes
responsibility for the whole procurement process. There-
fore, a renewed business model is perceived.
6.1. Case Study
This case study can be found with explicit details in
(Aleš Groznik and Mujkic, 2005) [9]. This case deals
with the fulfillment/procurement process in SC that con-
tains a Petrol Company (with multiple fuel stations at
different locations) and the supplier that transports the
fuel to the stations from a few larger warehouses. The
main goals are similar to the usual SC goals: to offer
good service to the final customer, while keeping costs
and lead-times low. The main cost of drivers is thus:
number of stock-outs, stock level at the fuel station and
process execution costs. The description of the current
process is as follows: the stock level is measured manu-
ally once a day. Results are faxed to the purchasing de-
partment that collects information from all fuel stations.
It predicts future demand, while taking seasonal and cy-
clical actions into account. Additional consultation with
the fuel station manager is possible, if needed. The needs
of several fuel stations are merged into one order. Tacit
employee knowledge is used to make and optimize or-
ders and transport routes. The analytical department con-
trols possible changes in demand and supply patterns and
transport routes. If required, it can adjust or cancel orders.
After that, the order is sent to the tran spor t comp an y. Th e
order has to be fulfilled with the available fleet, but can-
not be modified. Financial compensation is paid to the
transporter on the number of miles driven, fuel delivered
and punctuality of deliveries. While the description fo-
cuses on one typical fuel station, the inputs from other
stations are also taken into account at various points in
the model. Most importantly, the capacity of each truck
is considerably higher than the needs of one station so
orders from different stations are usually merged into one.
Obviously this is a specific case study with a standar-
dized product and only one supplier so the results cannot
be generalized to other industries without caution. The
main findings are however relevant to most SCs regard-
less of the industry. Based on the process described in
this study, an AS-IS model was developed. Process maps
(standard method for modeling and analyzing in business
renovation) were used for visualization of the model.
Here, employees can be quickly taught how to develop/
validate these models (Chen, 1999). They enable analy-
ses of the costs and time needed for the process (Indihar
Stemberger, Jaklic and Popovic, 2004). The Igrafx Pro-
cess 2003 with a graphical user interface was used—such
interface enables an easy understanding of everything
involved in the project (Bosilj-Vuksic, Indihar Stember-
ger, Jaklic and Kovacic, 2002) [10].
6.2. Results of the Business Process Modeling
Although all phases are supported by IT, deep structural
changes were needed to fully realize the potential bene-
fits. Some of the proposed changes can be described with
the popular buzz-word “vendor-managed inventory”
(VMI), others with material requirements planning, data
mining, operations research and generally SCM. How-
ever, it’s the interconnection of those changes that bring
the desired benefits. The chief idea is that the transport
company takes a strategic role in providing a sufficient
inventory to fulfill the demand of the end customer. It
takes all important decisions regarding orders in order to
realize this goal. The main proposed changes ar e: 1) The
measurement of the product is now fully automatic; 2)
The stock levels from all fuel stations are instantly
available to the transport company; 3) Future demand is
predicted using the model based on neural networks; 4)
The system at the transport company automatically iden-
tifies the current levels of stock, predicted future needs
and suggests possible orders and delivery among differ-
ent petrol stations; 5) The final decision is made and ap-
proved daily by an employee in the transport company; 6)
Operation research methods (e.g. the vehicle routing
problem) are used to optimize transportation paths and
times (see Gayialis and Tatsiopoulos 2004); and 7) In a
long-term, the locations of the warehouses can also be
optimized to bring further reduction in costs and trans-
portation times. Further advantages not directly visible
include: 1) Due to the use of optimization methods with
full information available the transport is more efficient;
2) the predictions of future demand are considerably im-
proved tacitly. The role of IT in all these suggestions is
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