Combining vertical and horizontal collaboration for transport optimsation Presented by: James Bake April 8 th , 2008
Customer driven supply chains and what this means for the management of freight transport
Larger percentage of cost of goods sold Strong correlation between customer service levels and transportation performance. IMPORTANCE of Transportation ?
Involves supply chain partners
Horizontal Collaboration - Involves other logistics service providers
SUPPLY CHAIN 2020
Customer response (service)
Component of supply chain excellence
Transport and Logistics inefficiencies
High inventory carrying cost
Unproductive waiting time
Lack of critical network mass
High transport costs
Traditional view Aim - Optimize cost (through lowest purchase price) Means - Adversarial (arms length negotiations) Scope - Purely Operational Supplier base number - Many Management - Short term contracts
Contemporary view Aim - Optimize value Means - Collaborative Scope - Strategic and operational Supplier base number - Selected few Management - Joint and on-going management
A collaborative supply chain simply means that two or more independent companies work jointly to plan to execute supply chain operations with greater success than when acting in isolation (Simatupang and Sridharan, 2002).
Customers, who are willing to share market information, allow their inventories to be co-managed with suppliers, build in understanding and flexibility into their relationship are able to show improved results (Harrigan, 1985).
Skylark is a telematic internet based system to meet haulage tracking needs. Created for three leading grocery manufacturers who collaboratively united to commission the system.
Value Optimization Improved Service Levels Visibility End Customer Satisfaction AND Potentially Lower Costs