Base and surge strategies for controlling environmental and economic costs in logistics triads

Abstract

The aim of this paper is to determine the extent to which it is possible to establish a ‘base’ and ‘surge’ strategy for logistics provision with a particular emphasis on minimising environmental and economic costs. Our method is the combination of empirical research outputs on the impact of uncertainty on economic and environmental costs, and a synthesis of the literature on resilience and the role of flexibility therein. We find that logistics planners either build contingents into their schedules (a priori) or that they respond with contingencies (a posteriori). The former is associated with a ‘base‘ approach; an example of which may be the incorporation of ‘slack time‘ into a schedule to accommodate expected delays due to road congestion. The latter is equivalent to a ‘surge‘ approach where as an example the logistics provider may have capacity flexibility, in the form of spare vehicles, to accommodate post-plan changes in shipper volume requirements. This paper explicitly rationalises the links between uncertainty, ‘base’ and ‘surge’ supply chain strategies, and the strategic use of logistics flexibility, in minimising environmental and economic costs in a logistics triad. The output is in the form of a conceptual managerial feedback control system.