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Branded manufacturers collaborate on primary distribution

By Rick Pendrous , 17-Sep-2007

Branded manufacturers collaborate on primary distribution

Competition between branded food manufacturers is increasingly being put aside as the industry seeks to improve the efficiency of primary distribution in the UK.

Collaboration and utilisation of vehicles used to transport goods are the two priorities for action, said Chris Tyas, Nestlé UK and Ireland supply chain director. Tyas is also co-chairman of Efficient Consumer Response (ECR) UK, a group set up to encourage collaboration in the supply chain.

Nestlé UK has worked closely with Sainsbury to reduce the empty running of vehicles by more than 110,000km annually. “We are also working with quite a lot of other people at the moment, which will come through in the following weeks,” said Tyas. “Some of those are competitors - some very direct competitors - and some of them are our customers, such as Booker.”

Tyas added: “We have recently reached agreement with Tesco on improved vehicle utilisation into their plants and there are others, which will be coming up shortly.”

Tyas believes the scope for collaboration between competitors is far greater on the primary supply side than for deliveries direct to supermarket stores, as advocated by Robert Schofield, chief executive of Premier Foods, who recently called for competitors’ bread deliveries to be combined.

Collaboration on primary haulage into supermarket regional distribution centres is “much less contentious than somebody’s bread coming into a customer on another branded lorry into the store”, said Tyas. “We could be carrying confectionery or biscuits for somebody else and they can carry our coffee, water, confectionery.”

He added: “There is a lot going on in that area. There are two or three of our competitors with whom we are doing trials. We expect announcements within weeks, not months, and they are with big branded competitors.”