I have asked Bill Loftis, a supply chain and transportation operations expert who recently joined Tompkins Associates, to talk to us about horizontal collaboration. He has conducted a number of development and implementation initiatives for clients involving collaboration for improved distribution and transportation. Take it away, Bill! 

Have you given any thought to distribution collaboration recently?

If not, now is definitely the time, especially if you think of collaboration as a dot-com era dated concept that yields little value.  Things are changing.  For those who have longed to see the fulfillment of the horizontal collaboration concept, it’s a hopeful sign.

From my most recent experiences with companies, I believe that the collaboration “conversation” has progressed. It seemed to me that, ten years ago, in its infancy, collaboration tended to be a side conversation. Then it faded away (no successful scalable solutions). 

But this year, it’s again become an agenda item.  In fact, I’ve noticed clients engaged in meetings on this topic and have attended large conferences devoted to it.  I’ve also spoken with several large US companies who are engaged in collaborative pilot projects with other shippers.  So this is more than a conversation change – executives are investing in it!

More evidence of progress:  I’ve recently noticed a few service providers explicitly advertising collaborative solutions.  Traditionally, most providers treated collaboration as an internal competency (rather than a stated service offering).  Collaboration was practiced, but it was kept under the radar as an internal efficiency exercise.  Today, more providers are making resource investments (warehouses and trucks) and marketing collaborative solutions.

These are meaningful signs.  Companies are investing in collaboration, and they’re following the key principles of a collaborative solution: combining multi-company volumes on shared resources to service customers with more frequent delivery cycles.  As you well know, any solution that can do this will vastly improve both cost and service performance.    

My goal today is to highlight the fact that collaboration is back in a big way.  There isn’t enough space here to cover the whole subject, so several future posts will tackle these key points:

1. Clearly define various collaboration solutions (differentiate between strategic versus tactical solutions).
2. Propose a compelling value proposition for a strategic collaborative solution to achieve pilot funding.
3. Describe the type of supply chain flow paths where strategic collaborative solutions best fit.
4. Make suggestions on how to solve the leadership vacuum for collaborative solution development.
5. Initiate a strategic collaborative pilot.

For now, I recommend you put collaboration research back on your action list.  Ask your logistics service provider what they’re doing.  Ask eligible supply chain partners if they are doing anything, and see if they would be interested in exploring the issue. 

I feel called to push this because I’m convinced that strategic collaboration solutions, for the right supply chain flows, can be better than any alternative. 

Let me know what you think. Are you seeing more horizontal collaboration these days? Does it have the attention of your supply chain leaders?

More Resources 

Horizontal Collaboration Value Proposition