Companies to test "shared" supply chain in Europe

Shared supply chains are coming in the not-too-distant future. That was one of the key trends identified by the Consumer Goods Forum, an international organization of retailers and manufacturers, in its January 2011 report, "2020 Future Value Chain: Building Strategies for the New Decade." In that report, the organization predicted that a decade from now, "distribution logistics will no longer be a competitive playing field." Instead, analysts wrote, companies will set up collaborative foundations for distribution.

The Consumer Goods Forum envisions that the impetus for shared supply chains will come from consumers who originate a demand signal for a product from home, a mobile location, or while shopping at a store. Manufacturers will then synchronize those demand signals with predictive forecasts to determine production. Next, they will ship the manufactured goods to "collaborative warehouses" where multiple manufacturers store their products. From there, companies will make shared, multimodal shipments to warehouses located on the outskirts of cities, where cross-docking will create loads for final delivery. In non-urban areas, shipments will go to regional consolidation centers for cross-docking and final delivery. Finally, manufacturers will collaborate on managing transportation to consolidate deliveries to retail stores, pickup points, or even consumers' homes.

Companies will assess this new type of supply chain based on such benefits as increased in-stock availability, lower carbon dioxide emissions, improved order-fill rates, better customer service, and reduced lead times, the Forum's report predicts. They will also assess this approach for its efficiency, especially whether it results in reduced costs, fewer nodes, and less product handling.

To test this more holistic approach to optimizing supply chains, the Consumer Goods Forum plans to launch a pilot program for collaborative shipments by rail, truck, and barge between Eastern and Western Europe. The participants hope that the pilot will demonstrate ways in which manufacturers and logistics service providers can reduce costs, energy consumption, and carbon dioxide emissions while improving customer service and security. The consulting firm Capgemini will coordinate the participating manufacturers and logistics service providers; a Capgemini consultant involved in the project said the pilot is still in the planning stages. HP and Microsoft also provide support for the initiative. To download a copy of "2020 Future Value Chain: Building Strategies for the New Decade," go to www.FutureValueChain.com.