Purpose – A literature review, confirmed by in-depth interviews in industry, indicated a high level of reluctance to implement horizontal collaboration in business. One of the main reasons is the lack of a strategic decision support framework for the implementation of horizontal collaboration. An appropriate feasibility or fitness test could be helpful here. Two companies strategically ready to work together should first test whether any insurmountable practices (e.g. difference in culture) inhibit the collaboration. If such practices are present, the collaborative initiative will probably be a waste of time and effort. This paper therefore aims to present a method to check the strategic fit.
Design/methodology/approach – By means of a general literature study, 300 performance indicators were collected. In a next step, they were reduced to 58 key elements by means of a focused literature study on partnerships and eight in-depth case studies in Belgian industry. Metrics have been assigned to each of these elements using the Supply Chain Operation Reference Model (SCOR). The elements are then combined into sub-criteria and criteria. Furthermore, the elements (both qualitative and quantitative) have been integrated through a multi-criteria decision-making method, namely analytic hierarchy process (AHP). Three different alternatives are considered: no-collaboration, informal collaboration, or partnership. By means of pairwise comparison of all criteria, sub-criteria and elements, an indication of the preferred form of collaboration is obtained and an improvement analysis per element can be performed.
Findings – The paper suggests and tests a method for evaluating the strategic fit, incorporating key performance indicators.
Research limitations/implications – The research assumes integrity of all partners.
Practical implications – This paper presents a straightforward tool that demonstrates how to measure the strategic fit of inventory pooling in a horizontal collaboration between different organizations.
Originality/value – The paper provides valuable information on measuring the strategic fit in horizontal collaboration initiatives.