Adrian Gonzalez posed some thought-provoking questions in his recent article “Unraveling the True Meaning of Supply Chain Collaboration.” No one can argue his point that the term “collaboration” is overused in supply chain management, but in the past 12-18 months I have seen this buzzword actually live up to its hype. There has been a major shift in the mentality of shippers and the way they are approaching the idea collaboration. What was once used for small shipments in a single lane is now taking place on a much larger scale, and the reasons behind it are much broader in scope.
At the outset of his column, Adrian examines the WHY, HOW and WHO with regards to collaboration. For a long time HOW dominated the minds of shippers and carriers, causing a fairly narrow focus with limited results. But with the intense push for network and process optimization that came out of the economic downturn, companies have established processes, systems and execution expertise that they can leverage with their partners. With HOW becoming less of an issue, companies are honing in on the WHY – a focus that can garner much greater results.
Each company has its own set of reasons behind its collaboration efforts, but some of the commonalities I have seen include:
- A stronger commitment to collaboration than in years past. Shippers are willing to take on broader projects such as shared, dedicated fleets and joint multi-shipper bids. They understand the value and are willing to invest the people and the time to get projects up and running smoothly.
- The availability of software-as-a-service or hosted technology from 3PL partners offers much greater network visibility and the ability to more efficiently identify and execute collaborative opportunities.
- The drive to go green has added an important consideration beyond pure cost savings. Shippers and carriers are looking to take miles out of the supply chain and are willing to pursue these initiatives not just for cost savings, but because it’s environmentally responsible.
- A shared network of customers, DCs in the same geographic locations provides an overlap that can easily be leveraged.
- Carriers have become more open and capable of supporting these initiatives, without the hassle of time and focus spent on fighting to make “back office” activities like freight payment work.
- Functionality to support multi-lane collaboration offers benefits that extend well beyond the flawed single lane inbound/outbound match-up initiatives of the past. Working with 3PLs as the facilitator extends the visibility and scale possibilities for shippers.
With many of the traditional methods of establishing strong, efficient processes exhausted, shippers are looking for alternative methods to drive better results and a greater return on investment. Creating a more integrated transportation network is a logical next step. And by working with 3PLs, shippers are expanding their transportation networks even more by broadening their ability to take advantage of collaborative dedicated fleets, multi-LTL bids and collaboration through distribution or sales channels.
While the term “collaboration” may be overused, with the proper focus, technology and partners in place, this effort is infinitely expanding the possibilities for cost savings and efficiencies, not to mention helping the environment along the way.
Ben Cubitt is Senior Vice President, Engineering & Consulting at Transplace. Mr. Cubitt has more than 20 years of industry and consulting experience in freight optimization. He has a deep familiarity with the freight procurement field working for consulting firms and multiple Fortune 500 companies in the consumer products, paper and automotive industries. Mr. Cubitt has led and assisted with bid projects for companies such as MeadWestvaco, Kellogg’s, RockTenn, The Home Depot, Colgate-Palmolive, RockTenn and McCormick Foods. Mr. Cubitt joined Transplace in July 2010 after four years as Vice President, Supply Chain for RockTenn Corporation. At Transplace he leads the engineering, carrier management and consulting teams. He has been a CSCMP member for over 20 years and has served two years as President of the Atlanta Roundtable and is currently a Roundtable Regional Advisor.