Lateral collaboration with cost-sharing in sustainable supply chain optimisation: A combinatorial framework

The growing importance of collaboration to achieve sustainability-related advantages for companies is widely acknowledged. However, the existing research lacks a framework determining how supply chains can strategically collaborate to achieve triple-bottom-line (3BL) sustainability-related objectives. In this research, we develop a framework based on scenarios designed for collaborative supply chains and then suggest novel models of lateral collaboration to optimise 3BL sustainability-related objectives. We propose a comprehensive mixed-integer linear programming model and investigate two collaboration scenarios and four cost-sharing strategies with which such collaboration would be likely to succeed. The proposed framework allows for optimal decision-making in multiple sustainable supply chains, simultaneously minimising total costs and environmental impacts as well as maximising social responsibility. Our research provides evidence that lateral collaboration enables optimal decisions and shows how the total cost is shared among network members to obtain profitable and sustainable solutions. The results demonstrate that the proposed collaboration mechanisms yield an effective supply chain design for each actor involved.