CSCMP's Supply Chain Quarterly
October 21, 2018
Forward Thinking

Companies increasingly willing to collaborate with competitors

A recent study found that a majority of companies would consider working with rivals in order to cut shipping costs.

Would you collaborate with your competitor when it comes to supply chain management? A recent study found that a majority of companies would be willing to try working with their free-market rivals in order to cut shipping costs. In fact, a fair number have already done so.

The U.K.-based logistics research firm Transport Intelligence surveyed nearly 150 companies in Europe, North America, Asia, and Latin America on their attitudes toward multimodal collaboration in March. A surprising 94 percent of respondents said that they would consider collaboration with another company; cost reduction was by far the most important reason for doing so. A little over 38 percent would consider collaborating with a competitor, while the rest would prefer to work with a noncompeting company. Under the right circumstances—that is, if the collaboration were managed by a neutral third party—the percentage willing to work with a competitor more than doubled.

Interestingly, the researchers found that 43 percent of the poll takers had already tried some level of collaboration with a competitor in the past. Most of those respondents came from the retail or consumer goods sectors and described themselves as European or global organizations. Joel Ray, the author of the study and head of consulting for Transport Intelligence, said that most examples of shared logistics were taking place in Europe. Examples cited included Kimberly Clark and Unilever building a joint warehouse in the Netherlands, Sony and Samsung sharing a warehouse in the Netherlands, and Norbert Dentressengle managing a tire distribution center for Goodyear Dunlop and Continental in the United Kingdom.

Respondents whose companies have tried collaborating on logistics activities said that cost savings generally outweighed the efficiency gains. On average, companies achieved cost savings of between 6 and 10 percent. However, those in the retail, high tech, automobile, and chemical industries reported cost savings from logistics collaboration exceeding 15 percent.

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