Boogie on, collaborative distribution!

If the concept of "collaborative distribution" fails to gain traction, it won't be because of a lack of effort (or imagination) on Chris Kane's part. No one has pushed the model harder than Kane, who is vice president of sales and marketing at Kane Is Able Inc., a Scranton, Pa.-based third-party logistics company.

Inside a trailer in the trade show area at the Council of Supply Chain Management Professionals' annual conference in San Diego, Kane ran a high-tech, high-energy video presentation about collaborative distribution, condensed into two minutes and driven by a pulsating musical score that was—to say the least—atypical for logistics presentations. Attendees got a taste of this unorthodox approach at a Sept. 25 networking reception, where Kane and his staff were decked out in funky, frilly green shirts designed to call attention to the environmental and financial benefits of the strategy. To this reporter—who was offered a shirt but demurred—all that was missing was Tony Orlando and a disco ball.

In brief, collaborative distribution calls for manufacturers that supply the same retailers to centralize their inventories at a warehouse controlled by a third party. A retailer would then synchronize its orders to allow the 3PL to consolidate goods from multiple—often competing—suppliers into full truckloads and ship them directly to the retailer's warehouse.

Proponents of the concept say that manufacturers that otherwise lack the volumes to ship full truckloads could combine one week's worth of orders into a single delivery and avoid the higher costs of shipping a few stand-alone pallets several times a week via less-than-truckload service. Those manufacturers would also improve their cash flow by sharing the warehouse and DC infrastructure with other companies, thus eliminating the costs of operating their own facilities. And the environment would benefit from having fewer trucks on the road.