Concerns over information, legalities hinder collaboration

Supply chain collaboration may be gaining converts in Europe, but North American companies are still reluctant to get involved, according to North American Horizontal Collaboration in the Supply Chain Report 2011, issued by the research firm eyefortransport. What's holding them back? Fear of information disclosure and the absence of a clear legal framework, cited as the biggest barriers to engaging in such activities as sharing distribution centers, combining loads into truckloads, and joint manufacturing.

More than 400 companies in North America took part in the survey on collaborative supply chains conducted in January and February of this year. Participants included third-party logistics service providers (3PLs), manufacturers, retailers, carriers, and other groups such as consultants and technology solutions providers.

The number-one concern among shippers and the second biggest concern for carriers, the survey found, was unauthorized access to company information. Some 40 percent of shippers (manufacturers and retailers) cited a fear of information disclosure as a barrier, while 42 percent of carrier respondents identified that as a worry. However, carriers were most concerned about legalities. Fifty-five percent of carrier respondents said the lack of a legal framework or contract templates was the biggest obstacle to supply chain collaboration. Only 12 percent of shippers, however, cited that as a hindrance.

Third-party logistics companies, meanwhile, worried about direction and control in a collaborative arrangement. In the survey, 3PL respondents said their top concern was uncertainty over which client's needs would take precedence in a collaborative arrangement. They were also unsure who would act as the principal client.

When asked what would encourage them to invest in supply chain collaboration, carriers most often cited the establishment of gain-sharing models. For their part, the largest number of shippers said a viable proposal from a noncompeting company to share a supply chain would be a worthwhile incentive, while 3PLs said having more shippers open to this type of innovation would encourage them to get involved.

[Source: eyefortransport, North American Horizontal Collaboration in the Supply Chain Report 2011.]