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Transport Logistic Collaboration Makes Sense

Collaboration is one of those current commercial buzz words that mean businesses are jumping about making sure people speak to others, grab the latest apps and exploit social networks, face-to-face meetings are fully effective and time is used to the maximum. All very sensible, but this is co-operation and organisation within the same company.

Now the smarter money is on inter-company collaboration.

Joint working at the technology level has been around for some time, with the major software producers enabling it through programmes that businesses can utilise.

Logistics Collaboration

Now it is extending to packaging, distribution transport and logistics generally.

The arrival of cloud technology has been instrumental in supply chain coordination among hundreds of global companies. It has become sound IT economics. Greg Kefer of GT Nexus said in October 2011, that just as social networks ‘inverted the traditional models of personal contact systems’ by allowing instant updating of a whole network (chain) or friends from one page, so collaboration platforms ‘support trading partner networks’.

He wrote warmly of the ability of such systems to transform working for company purchase orders, shipments, commodity codes and sourcing factors. ‘Imagine the power of an information model that allows an object to be updated once, in one place, for everyone who cares about that object to get the full news immediately’.

Green is the Colour of the Collaboration

In 2009, in response to the Institute of Grocery Distribution’s initiative for sustainable distribution, some 37 UK manufacturers and food retailers saved 53 million road miles through logistic collaboration, according to Huddle Blog. That’s the same as taking 900 lorries off British roads, and not burning 26 million litres of diesel in a single year.

Tescos and its wine importer, JF Hillebrand collaborated in a scheme to put wine onto trains, not roads, at an estimated saving of three quarters of a million road miles. The potential for the entire infrastructure of the biggest grocer in Britain, is enormous: not just using trains instead of trucks, but thinking differently about the transporting process.

Kimberly-Clark and Kellogg collaborate by filling trucks to capacity with goods, smaller loads to smaller outlets. Sainsbury’s and baby food supplier Organix collaborated to use vehicles better between factory and depot. Asda and Unilever share transport of brands like Dove, Lynx and Sure saving about 50,000 miles.

Links between manufacturers and retailers are obvious areas for agreement. Collaboration between rival manufacturers takes green collaboration up a gear. Nestle and United Biscuits combined on a strategy to share lorries and deliver each other’s products along with their own.

Richard Wilding, Professor of supply chain strategy at Cranfield University School of Management said in October 2011, that with severe pressure on resources, raw materials in short supply, oil running low and money still tight, organisations must rethink the way resources are used.

He argued for abandoning the ‘consumption model’ (buy it, use it, throw it) and starting to share and rent to create a sustainable model. Green, again. He asked:

  • does every household need a lawnmower? No, so…
  • does every company need its own warehouse, factory, vehicle fleet?

Asset sharing, collaborative working, economies of scale and better use of new technology, of course are common sense. He suggested, for example, that with 3D printing and efficient data transmission, parts could be manufactured locally to a central design, thus saving on transport costs and delay.

He said that ‘supply chain skills are another scarce resource’. In the past, traditional supply chains demanded technical skills (inventory management, resource acquisition, distribution, financial). ‘The order-winner today is emotional intelligence: the ability to build relationships and collaborate with suppliers customers and competitors’.

So wherever a business is on a chain, look up or down and green collaboration and sustainable supply is just what industry/commerce/retailing/consumers want and need and deserve.

Sources:

  • GT Nexus, Greg Kefer, The Cloud Solves Those Lingering Supply Chain Problems, 28 October 2011.
  • Prof Richard Wilding, Centre for Logistics and Supply Chain Management, Cranfield University School of Management.
  • Huddle Blog, G is for Green Collaboration.

Photo: Kim Traynor