Tuesday 25th Oct 2016 - Logistics Manager

Think the unthinkable

It is axiomatic that when times are good, companies tend to focus on marketing and product development. It is when the going gets tough that the focus moves towards the supply chain and the potential savings that more efficient logistics can give.

But achieving those savings is going to require a paradigm shift in thinking. There has been lots of talk about the potential of collaboration in the supply chain to improve operational efficiencies. But getting companies to work together has so far proved to be problematic to say the least.

The chances of getting competitors to collaborate are minimal. But even companies that do not compete directly tend to be understandably suspicious. A collaboration might save money but does it mean compromising service levels? Will the flexibility be limited – could you respond if a competitor sought to gain a competitive advantage with a higher service level?

So it is intriguing to see that Kellogg’s and Kimberly-Clark are forging a relationship through the good offices of TDG. It looks like a marriage made in heaven – non-competitive products that need high-cube transport. And TDG is reporting a seven per cent saving in transport costs. The question, of course, is will it last?

Life is only going to get tougher over the short term but initiatives such as this highlight the fact that solutions are within grasp. But, increasingly, success will depend on thinking the unthinkable.