Combining vertical and horizontal collaboration for transport

optimsation

Presented by:

James Bake

April 8th, 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?

Vertical

Collaboration

Horizontal

Collaboration

Vertical

Collaboration -Involves supply chain partners

Horizontal

Collaboration -Involves other logistics service providers

SUPPLY CHAIN

2020

Efficiency

Asset utilization

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