Assessing collaborative distribution

Challenge

A consortium of six consumer goods shippers were seeking to understand the cost and service impact of co-loading goods from each company’s neighboring origins and bound for common retailers. In addition, the study participants wanted to understand the cost and benefit sharing approaches, the supporting technology backbone, and the data security and business confidentiality implications of such a collaborative shipping program.

Approach

• Data collection and model development: Each participant provided detailed shipment data, including commodities, service requirements, and origins/destinations which were combined into a transport optimization tool.
• Model analysis: Running alternative scenarios and optimizations considering alternative transport modes, vehicle types, loading sequences, and routes.
• Workshops: Sharing interim results and fine-tuning cost and benefit sharing methodologies in an interactive workshop format.
• Findings report: Providing the participants with the expected benefits of such a program, a technology solution, assessment of the role of 3PL providers in supporting such a program.

Results

• An assessment of expected hard-dollar cost saving and qualitative service benefits.
• A technology solution and roadmap for linking the collaborative solution to the participants’ core shipping applications.
• Implementation plan to move forward.