The bigger challenge is outlying dealers. Here, we have the issues of long travel distances and low dealer density. As such, we have to choose between expensive dedicated delivery service and less expensive LTL service. The latter provides a lower level of service, since it takes longer and doesn’t generally offer fixed delivery schedules, not to mention the damages from all the handling. Dealers hate receiving their parts orders via LTL.
Timeout: There’s nothing new about the concept of collaboration. OEMs have been sharing transportation routes for years. With recent changes in the economy, the pressure is on to increase efficiencies without compromising service. The key is finding the opportunities and then exploiting them.At the end of the day, nearly all of the OEMs had identified at least one opportunity to collaborate with another OEM to raise the bar on the cost vs. service tradeoff. Many of these opportunities are worth hundreds of thousands of dollars per year, if not millions. Not bad for one day’s work. Well, ok, there’s a lot more work to do in order to cash in on the opportunity. Nevertheless, it was a day well spent by all.
This was our second year of hosting the Supply Chain Collaboration session. In addition to telling us how satisfied they were with the day, repeat attendees also commented on how it gets a little easier each year as OEMs get more comfortable with the process and give more thought to the collaboration possibilities.
Bottom Line: Optimizing the cost vs. service tradeoff without getting outside the boundaries of your own business will often yield suboptimal results. Unless you explore the possibilities, you’ll never know how suboptimal your results are. Given the ROI for the time spent to identify collaboration opportunities, think about getting involved the next time a collaboration opportunity presents itself.