Still Have Some Work to Do

Reading my recent copy of Inbound Logistics (May 2011), I discovered a paid advertisement railing against using terms to essentially re-brand a service or product that is already in existence.  We’ve all been to the supermarket and seen the “new and improved” label plastered on everything from cleaning products to mouthwash.  We can all attest that the marketing departments in these companies have figured out a way to get our attention by informing us that their products clean or taste better.

These incremental tweaks to their products have (in most cases) resulted in a superior experience.  In this case, progressive change (product evolution) is a good thing, right?  That’s why this ad in Inbound Logistics is so confusing.  It references re-branding, yet fails to accurately describe the collaborative distribution process.  

On one hand, I’m certainly happy that Collaborative Distribution is getting noticed in the industry.  However, this commentary proves to me that there are still misconceptions about what this supply chain service delivers.

It is not simply a reboot of an old product.  You could just get a ticket to the local movie theater this summer if that’s what you’re after.  Collaborative Distribution takes both the manufacturer/shipper AND the retailer into account.  The 3PL is just a facilitator to bridge the gap between the two parties in order to streamline the order-to-delivery process.  With Collaborative Distribution, everyone wins.

Freight consolidation retains the current distribution model with one truck traveling to separate DCs to collect all product.  Collaborative Distribution combines all products into a shared, single DC.  Freight consolidation uses several logistics providers creating complicated bills and routes, as well as increased shipping times.  Collaborative Distribution is handled by a single logistics provider who can simplify billing and provide flat-rates and per-pallet charges.  In freight consolidation, the retailer is not a consideration. In Collaborative Distribution, retailers play a critical role in the process, just like they do in everyday business operations. (Check out the video below for a 2-minute description of collaborative distribution.)

I’m all for standing up and giving your opinion.  Just know all the facts before you speak – especially if you’re paying for it.