France—Kellogg uses DHL while
Kimberly-Clark uses the French company
FM Logistic to run their respective distribution centers. However, because both
3PLs operate facilities near one another in
the city of Orleans, a single truck can stop
at both facilities. Now, trucks operated by
the French 3PL Norbert Dentressangle stop
at Kimberly-Clark’s warehouse to pick up
half a truckload and then move on to
Kellogg’s facility to pick up goods destined
for Carrefour. (In late March 2011, Norbert
Dentressangle completed its acquisition of
TDG, the 3PL both manufacturers use in
England.)
The second difference is that in France,
Kimberly-Clark is responsible for maintaining inventory levels for both its own
and Kellogg’s products at Carrefour’s distribution center. To handle the task of
assembling full truckload shipments and
running its vendor-managed inventory
(VMI) program, Kimberly-Clark brought
in a vendor-managed inventory company.
“We use a vendor-managed inventory system that allows us to look into the customer’s DCs and generate replenishment
orders,” Surtees says. “The VMI [company]
does the ordering piece on behalf of
Kellogg’s and Kimberly-Clark.”
SHARED SUPPLY CHAINS SPREAD
ACROSS EUROPE
In the near future, Kimberly-Clark hopes to
expand its use of collaborative supply
chains into other countries, including
Belgium, Italy, and Germany. But the man-
ufacturer is no longer alone in these efforts.
Driven by retailers’ needs, other CPG com-
panies in Europe are starting to set up
shared supply chains. The idea is catching
on quickly, says Surtees. “Our customers
want to drive stock from their supply chain
and want to shorten the replenishment
cycle.” Furthermore, he says, “CPGs are
signing on to the concept because they are
trying to find ways of servicing the cus-
tomer better while trying to reduce costs,
particularly transportation.”
There is so much interest, in fact, that
several hundred manufacturers, retailers,
and logistics service companies now belong
to the organization European Logistics
Users, Providers and Enablers Group
(ELUPEG) ( www.elupeg.com), which was
formed to champion collaborative
supply chains.
Although collaborative distribu-
tion is a hot trend right now, supply
chain managers should think care-
fully before they get involved. What
advice would Surtees give a compa-
ny that wants to set up a collabora-
tive supply chain? The most impor-
tant thing, he believes, is to select
the right partner. “You have to be
cautious about who you get into a
relationship with,” he says, “because
getting out of it once you have set it
all up could be quite difficult.”
In Surtees’ view, it’s also impor-
tant for all parties in the shared sup-
ply chain, including the third-party
logistics company, to have a “prag-
matic way” of sharing the gains and
benefits. For example, the deal
Kimberly-Clark struck with Kuehne
& Nagel in the Netherlands lets both
companies share financial benefits.
“The rate we are charged per case
picked by Kuehne & Nagel is adjust-
ed based on the volume picked on
our behalf,” he explains. “The sav-
ings flow through as a rate reduc-
tion.” Kimberly-Clark also receives
about one-third of the 16-percent
cost reduction from the automated
handling system mentioned earlier,
also in the form of a rate reduction.
