Supply chain collaboration, when it happens at all, is generally restricted to non-competing organisations.
It is relatively easy for companies like Kimberly-Clark and Kelloggs to work together to cut logistics costs. Potential conflicts tend to be related to providing the appropriate level of service for each partner.
But what about collaboration between companies in the same business? All sorts of competitive issues start to appear.
And that is what makes last week’s announcement from The Hershey Company so intriguing. America’s largest chocolate producer has entered into a supply chain alliance with The Ferrero Group – maker of Rocher chocolates.
The North American alliance takes the form of a joint warehousing, transportation and distribution initiative.
The two companies also plan to work together to maximise corporate social responsibility efforts with the expectation of reducing carbon dioxide emissions and energy consumption in warehousing and freight, with fewer vehicle journeys needed to move products to customers.
They are looking for productivity improvements from the initiative to start to come through in 2012.
Hershey chief John P Bilbrey said: “Collaborative supply chain operations are a growing trend across industries as companies seek to fully leverage their logistics infrastructure. Although we are initially focusing on one region of our business, we are excited about the full potential of this project.”
Significantly, the alliance does not encompass manufacturing, selling or marketing activities.
Nevertheless, this is a significant step in the development of collaboration in supply chain operations. It will be intriguing to see how much further the two partners can take it.
