Big Idea: Sustainability, Research Feature, December 16, 2013
Collaboration has a huge potential for reducing the carbon footprint of logistics http://t.co/0XOT9Hp9M8— MITSloan Mgmt Review (@mitsmr) December 29, 2013
These three projects highlight the power of collaboration to unlock the huge potential for reducing the carbon footprint of logistics, and by extension, the environmental performance of participant organizations.
The lessons pertain to three primary collaborative partners: customers, competitors, and suppliers. While the importance of collaboration was the central thread, each project highlighted a particular set of challenges and solutions.
Customers were willing to engage as long as their service expectations and risks were acknowledged and mitigated throughout the change. For example, Boise made a special effort to ensure that switching shipments from truck to rail transportation would not require its customer, OfficeMax, to carry more inventory.
Rivals needed transparency, well-defined mechanisms of information exchange, and a neutral third party to jump-start the collaboration. In the collaboration between Ocean Spray, Tropicana, and Wheels Clipper, for instance, one of the keys to success was improving the flow of shipment information between the parties, thus promoting greater operational transparency and trust.
Suppliers are generally familiar with collaborative partnerships, so in this case the barriers tended to be more around giving a higher priority to competing initiatives within respective organizations. Caterpillar already had a strong case for reducing the weight of the returnable containers it used. Still, the change required the close cooperation of Cat’s suppliers, and involved reconfiguring the inbound supply chain, a significant undertaking. One of the challenges the manufacturer faced was persuading its busy suppliers that the effort was worthwhile.
In addition to the vital role of collaboration, all three case studies showed that well-defined measures of success and slow rollouts guaranteed “stickiness”. Other common ingredients of success include a committed champion willing to go the extra mile...