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  • MAP Asia Pacific Ltd

Sharing is rewarding: How pooling supply chain resources can make India more competitive, efficient

In 2003, when Kimberly-Clark Corporation and Unilever’s home and personal care unit decided to operate a shared delivery system in the Netherlands, little did anyone know they were pioneering something that would emerge as one of the best supply chain practices in the world.

Two or more companies use the same distribution facility to serve common customers in a shared supply chain model. In the Netherlands experiment, the two companies made joint deliveries to customers by sharing a truck and each company filling half of the vehicle. The shared approach yields multiple benefits to every stakeholder in the value chain, as it cuts logistical inefficiencies at multiple levels.

Suppose three companies have factories operating in the same vicinity, and they make different products but use a common raw material. Using a shared model, the three companies can source the raw material from a common supplier and get it at one go, instead of it being transported thrice. The procurement and logistics cost would come down considerably if they can coordinate among themselves.

Many companies in the UK have come together to share transport resources. But now, some 17 years since the experiment started in the Netherlands, many manufacturing and logistics companies in India seem to have reposed hope in this concept, especially as one issue after another disrupts logistics operations across the world.

Need of the hour

Experts say the economic climate — disruptions, inflation, conflicts and fear of a recession — is causing businesses to look for innovative and cheaper measures. The world has been suffering uncertainties for long and the turmoil may get worse; they say. Under such conditions, it makes sense to try a shared supply chain model.


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