Collaborative Distribution: Taking Off the Training Wheels
To break the cycle of needless, duplicative logistics costs, many competitors are choosing to work in tandem.
A small but growing number of shippers now view the infrastructure required to move product from manufacture to retail as an opportunity to collaborate, rather than compete. That opportunity lies in cutting expenses that are needlessly duplicated across shippers: transportation planning, warehousing, exception management, accessorials, less-than-truckload shipments, underused capacity, and other supply chain costs.
Collaborative distribution has long been the no-brainer idea that no one acts on, with obstacles mostly related to entrenched investments, cultures, and hidden agendas. While the group of early adopters is small, the tide is beginning to turn. Promising case studies and compelling research prompted some market leaders to open their minds to new ways of moving product, satisfying customers, and boosting the bottom line through both savings and increased sales.
“Over the past 10 years, interest in collaboration has picked up, but it has consisted of forecasting between manufacturer and retailer, or a few manufacturers pooling resources together. Supply chain was not involved,” says Brenda Hambleton, chief marketing and strategy officer for York, Pa.-based ES3, which specializes in working with consumer products goods (CPG) manufacturers. “Today, collaboration is more in vogue, and encounters less resistance.”