Phil Roe discusses how collaborating with your competition can get you further …
Can competitors ever be collaborators? Traditionally, the idea of working with the competition has been treated with extreme caution as businesses fear giving away competitive advantage. However, working with ‘frenemies’ can help businesses achieve economic and environmental efficiencies.
There is increasing pressure on businesses that rely on transport to increase the efficiency of their operations while maintaining high delivery standards. The same applies in the FMCG sector, whether deliveries are handled internally or by a third party provider. At the same time, transport plays an increasingly important role in the reduction of the business’s carbon footprint.
This is being driven by government targets as well as greater public awareness of environmental issues; consumers are increasingly focused on the provenance of the products they buy, the distance travelled and the mode of transport used. In addition to greater transparency, businesses have to find new ways to make supply chains more environmentally efficient. In response to these pressures, transport and logistics companies offer a collaborative model of delivery to their partners, whereby different and often competing businesses will send products together on journeys to retail outlets or distribution centres. As well as saving on transport costs, collaborative partnerships help businesses address the challenges of changing customer demand by allowing greater flexibility in the supply chain and across the distribution network. This has helped businesses achieve levels of supply chain performance that they would have been unable to achieve alone. This is particularly notable in the retail sector – an early adopter of collaborative transport models.
For example, in 2010 DHL introduced convenience store retailer Nisa to BP, having identified the potential for the two businesses to benefit from shared journeys to deliver groceries in England and Wales. In Scotland, Nisa also works with pub chain JD Wetherspoon, sharing vehicles to drive up utilisation and reduce costs. Retail supply chains have been affected by changing consumption patterns. Shoppers make smaller, more frequent, shopping trips meaning stock has to be topped-up more often, especially fresh produce. As there is often a significant overlap in FMCG and retail supply chains, there is great potential for FMCG brands to become more involved in collaborative partnerships.