From SCDigest's On-Target E-Magazine
- May 9, 2013 -
Supply Chain News: Sustainability Driving Push for Collaborative Transportation, but Savings are Real Too
JCPenney, 7-Eleven Both Now Hauling Goods for Rivals; 7-Eleven Gets Around Local Bottling Delivery Rules in Interesting Way
SCDigest Editorial Staff
The math behind the opportunities for collaborative transportation have been around since the 1990s. That simply means it has been easy to show how collaboration around trucks and deliveries could provide significant savings to the supply chain.
SCDigest Says: |
 |
| "The opportunity to improve sustainability for the industry really drove the strategy, but in the end it also helps us reduce our supply chain costs," 7-11's Clinger said. |
|
What Do You Say?
|
|
|
|
Yet, despite that evidence, the concept never has really caught on in the US market except for sort of one-off efforts between individual companies, often the same metros areas.
In fact, a company called Nistevo was founded in the early 2000s with the express mission of having a platform for enabling collaborative moves across companies, and initially gained a large interest from the market and companies such as Georgia Pacific and Pillsbury. But the concept never really took off, and Nistevo turned to become a more traditional (though Cloud-based) TMS
provider, now after a couple of acquisitions becoming IBM's TMS solution.
For awhile in the mid-2000s, rising transport costs and trouble accessing capacity appeared like they may open the collaboration door, but in the end neither factor individually or combined were enough.
It just seemed there were always too many issues to resolve: how the savings should be shared, what happens if schedules change, confidentiality, etc.
But, as SCDigest predicted a few years ago, sustainability programs may just be the lever that at last does pry open that door.
That at least is how supply chain executives from department store chain JCPenney and convenience store chain 7-11 stores positioned it during a panel discussion at the Warehouse Education and Resource Council annual conference in Dallas last week.
Christy Clinger, vice president of logistics and demand chain at 7-Eleven, Inc., said her company had recently begun doing third-party logistics work in delivering products for other retailers in many markets.
"The opportunity to improve sustainability for the industry really drove the strategy, but in the end it also helps us reduce our supply chain costs," Clinger said, noting the company's cold chain capabilities are attractive to many other retailers.
Similarly, Marie Lacertosa, senior vice president of supply chain for JCPenney, said her company has ramped up its collaboration around backhauls with other companies, especially on the West Coast - and that those transportation "partners" can include some of their most fierce market rivals.
That probably would not have happened if not for the sustainability imperative, Lacertosa said.
In that backhaul collaboration, a Penney's truck might deliver from one of its distribution centers to a store or set of stores, then pick up a load from another retailer or retail vendor, and deliver that load somewhere back near to its original starting point.
(Transportation Management Article Continued Below)
|
That could result in more than 50 deliveries per week to some stores, and be something of a disruption in total to store operations. In an effort to reduce that disruption, and save on delivery costs at the same time, Clinger said on the West Coast at least the chain has been using a different model over the past couple of years, where it moves some of former DSD products into its DCs and then delivers all three classes of products on a single truck three times per week.
