HIS OFFICIAL TITLE IS CHIEF STRATEGY
officer for the third-party logistics firm
Kane Is Able, but Christopher Kane may be
better known as an evangelist. For the past
few years, he’s been out spreading the gospel
of collaborative distribution, a model in
which two or more suppliers to the same
retailer share distribution resources. For
instance, rather than operating their own
DCs, the suppliers might centralize their
inventories at a warehouse controlled by a
third party. The 3PL would then consolidate goods from
multiple—often competing—suppliers into full truckloads
for shipment to the retailer’s warehouse.
The practice is not only a money saver, says Kane, it’s also
“planet-saving.” By sharing loads, companies can improve
efficiencies and reduce the number of trucks on the road.
While sharing freight capacity and co-locating inventory
are not new concepts, Kane says they haven’t gained much
traction with those who could benefit the most: small and
medium-sized manufacturers that don’t have the volume to
ship in full truckloads. “Collaborative distribution levels the
playing field for mid-tier companies because it allows them
to gain scale without size,” says Kane.
QWas there an event or “aha moment” that convinced you of the importance of sharing distribution infrastructure?
AIn July 2008, when the price of oil hit $145 a barrel, my phone began to ring. The callers were customers
looking for ways to deal with this crippling cost burden. At
the same time, I was reading reports from Capgemini and
others on the “supply chain of the future” and the potential for collaborative strategies. So I started exploring how
supply chain collaboration could be applied to consumer
packaged goods (CPG) distribution—a prime focus of my
company.
The numbers told the story. There were staggering ben-
efits to be gained if we looked beyond incre-
mental changes to the current model and
moved to a new model for CPG product
distribution—one based on companies’
sharing a common infrastructure. They say
necessity is the mother of invention. It was
really our customers’ pain that drove us
down this path.
Jonathan L.S. Byrnes
IN 1976 WHILE STILL A DOCTORAL STUdent at Harvard University, Jonathan Byrnes
founded a consulting firm, Jonathan Byrnes
& Co., that got involved in such pioneering
projects as the development of vendor-man-aged inventory programs. He has also guided clients through supply chain reorganizations and strategic repositioning programs.
Since 1992, Byrnes has also been a senior
lecturer at the Massachusetts Institute of
Technology (MIT), where he teaches courses in supply
chain management.
Byrnes has written more than 100 books,
articles, and columns on supply chain management, integrated account management,
and change management. His latest book,
Islands of Profit in a Sea of Red Ink, was
named to Inc. magazine’s 2010 list of best
books for business owners.
QYou’ve said you became interested in supply chain management because of
your interest in the spatial pattern of business. Can you
explain what you mean by that?
