The term Collaborative Logistics is being increasingly used these days and it refers to an evolution of Integrated Logistics promoted by the current economic situation on a global scale.
Logistics operators are in constant search for new strategies that allow them to reach customers and offer the best price while ensuring a high quality service. This need has led to a trend towards collaboration between partners, customers and other members of the supply chain, the so-called “stakeholders”. These collaborations mainly consist of integrating resources for the mutual benefit.
Integrated Logistics was intended to optimize the management of information, material and product flows throughout the chain. Collaborative Logistics is meant to foster collaboration and teamwork towards tactics that contribute to the benefit of a group or a community.
Collaborative Logistics addresses the need to innovate with the aim of improving service to end customers and to the rest of the supply chain: suppliers, carriers and logistics operators, as well as quality auditors. In this regard, we need to develop strategies focused on providing effective solutions to business problems that affect all the parties in the supply chain. We can use the saying “there’s strength in numbers” to summarize this concept of logistics. Teamwork based on trust, transparency and convergence is key in technology solutions.
Three essential elements are the basis of any collaborative process:
- Teamwork based on trust and transparency that allows developing joint operations and strategies so that all parties involved are benefited. Thus, it is essential to define the objectives beforehand.
- A set of agreed rules to help cope with routine and unexpected situations.
- The various partners involved in the collaborative process must be willing to discuss difficult issues and negative aspects that may occur within the collaboration.
The intention is to improve the service quality, reduce costs and time, and approach administrative processes from a proactive attitude. These are some examples of the issue at hand:
Order reception usually follows a reactive model: the company waits until they receive the orders (via web, email, phone or others.). An implemented model of collaborative logistics consists of having the necessary information to anticipate and generate customer orders accurately in terms of time, quantity and delivery points.
As for the restocking of supplies, in general, the provider does not exactly know what we intend to buy, in what quantities and on what dates. Using the collaborative method, he would have the necessary information (inventories, consumption rates …) and he would improve his service and be able to provide it automatically.
The same applies to freight and logistics operators. If both had access to the necessary information, the result would be a significant reduction in costs and time for both parties.
Likewise, any other external agent or freelance provider who renders a service could be smoothly integrated in a collaborative community.
The New Information and Communication Technologies (ICTs) have become powerful tools for improving supply chains. The growth of electronic commerce and the need to improve processes towards the collaborative category have made ICTs an essential strategic element in terms of operability and productivity, as well as profitability. Some of the most widespread technologies today, besides the usual barcodes, RFID and EDI systems, are some web systems along with CRM and BPM tools. They all aim to contribute and help to share information between customers and suppliers. However, we need to resort to “The Cloud” as the quickest and most effective system for data sharing and managing the entire information flow.
In addition to the companies and the end customer, the concept of collaborative logistics also offers a side benefit to the environment. Because of the need to use fewer devices and tools and, therefore, lower fuel costs, the result is a dramatic and necessary reduction of CO2 emissions into the atmosphere.
As there are only advantages, we just need to decide when to get down to it…
