Value chain collaboration and coordination

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Today, there are large and rapid changes in the world on the environmental, economic and political fronts to establish a sustainable bioeconomy. Also, Canada has committed to reduce its GHG emissions by 30% until 2030 in order to meet the Paris Agreement. To meet this ambitious target, Canadas natural resources play an important role. Natural resources value chains (VCs) include multiple industrial sectors including renewables such as forests and agriculture, as well as non-renewables such as minerals. These complex VCs involve many public and private organisations, e.g., small and large private companies, governments, First Nations communities, hunters, and tourist representatives, which are driven by socio-economical, technological and environmental forces defining a set of objectives that often are conflicting although they may share common goals. The long-term objective of this proposal is to develop engineering analytics to enable an efficient and sustainable management of natural resource VCs for all potential values to society. The short-term goals are to develop decision tools to enable collaboration among stakeholders in the transportation part of the VC. Collaboration has shown to reduce costs and GHG with 5-15% but it is critical to find mechanisms to support this. Once supply and demand points are known, the transportation planning is as follows. First, the best possible route is found; this considers aspects such as distance, fuel consumption, time but also safety and stress. Second, there is a payment for the route which typically follow a simple agreed formula. However, the payment is balanced in average but on a detailed route level, the payment does not reflect the actual cost. Reason are, e.g., that factors like safety and stress are not cost drivers and fuel consumption is not explicitly included. The approach does work as long as all routes belongs to one company. However, when there is a collaboration, routes are mixed between the companies and payments become unfair. As a result, many potential collaborations are not put into practice. A set of work packages are identified to meet the short-term objectives which also create a stimulating research environment for multidisciplinary research training of HQPs to meet societal challenges. The first part is focusing on developing non-biased and transparent analytics tools to establish transport models that essentially integrates the complex and multi-objective route planning with the payment principles. This will enable an industrial standard that supports and motivates collaboration among stakeholders. The second part focus on mechanisms and cost sharing allocations to enable partners to collaborate despite more complex situations, e.g., seasonal fluctuations in supply or demand or different efficiencies in the operational execution. Finally, we propose a decision theatre where it is possible to implement and analyze collaborative planning in practice.