Collaboration brings savings for Kellogg’s and Kimberly-Clark

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Kimberly-Clark and Kellogg’s have seen cuts of seven per cent in their transport costs from a collaboration project run through TDG.

The operation is saving 270,000 miles a year and more than 30,000 gallons of diesel a year while the combined environmental benefit equates to annual savings of 380 tonnes of carbon dioxide.

TDG uses its hi-cube vehicles and warehousing network to find practical ways to consolidate Kimberly-Clark and Kellogg’s orders and delivery schedules without impacting on customer service expectations across their individual bases.

The two manufacturers share many small independent and multiple retail customers. Both also have long term relationships with TDG. Discussions started in 2005. Coming up with a workable plan involved putting aside traditional approaches and bringing together senior supply chain decision-makers with the will to work hand-in-hand with other parties.

The project kicked off in 2006. TDG began overnight trunks of Kellogg’s products from manufacturing units directly into the Kimberly-Clark distribution centre at Northfleet.  Kellogg’s loads are cross-docked overnight, consolidated with Kimberly-Clark deliveries and matched to small independent and small multiple customers across London and the South East. For retailers, the result has been seamless, as Peter Surtees, Kimberly-Clark’s Director of European Supply Chain explains.

The collaboration is now being rolled out across the rest of the country and this month, Kimberly-Clark, Kellogg’s and TDG are announcing a project for the North of England, use Kellogg’s Trafford Park distribution centre, managed by TDG.

“Everything really stacks up,” said Colin Ridler, Supply Chain Director of Kellogg’s. “TDG’s 2008 proposal enabled us to consolidate our stock holdings under one roof and accommodate and extension of our already successful venture with KC.  The whole package delivers meaningful savings for us, as well as the environmental and efficiency benefits achieved.  We are now discussing additional opportunities and looking for new ways to extend the collaboration agenda even further.”

LPR red pallets are used exclusively on all the deliveries for both Kimberly-Clark and Kelloggs. This not only simplifies pallet stock levels and creates further savings on empty running because of LPR’s partnership agreement with TDG to bring pallets back in empty trucks to its pallet sorting facilities in the North and South of England.

Pat Lally, TDG operations director said:  “By applying our operational expertise at a macro and micro level for both manufacturers, we’ve made it work.”

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