Industry drives new era of sustainable distribution

By Rod Addy

- Last updated on GMT

Related tags Logistics Igd

Industry drives new era of sustainable distribution
Firms are joining forces to save road miles, according to Grocery think tank IGD

The food and drink sector is no longer paying lipservice to sustainable distribution, with even previously fierce rivals collaborating on innovations.

That was the verdict of grocery think tank IGD, which is tracking and driving a sea change in the approach to collaborative logistics through its Efficient Consumer Response (ECR) unit.

An ECR survey of more than 100 people from a mixture of retailers, manufacturers and third party logistics firms bore this out.

Over half the respondents said they were making changes beyond those mandated by cost savings to make their supply chains more sustainable. And 44% were willing to consider sustainable initiatives without short-term financial benefits.

Strikingly, 63% agreed strongly that co-operation was vital for the development of the industry. Examples of recent collaboration included joint deliveries of Nestlé KitKats and United Biscuits' Jaffa Cakes, reported Tarun Patel, head of supply chain & ECR at IGD. Half of the respondents believed shared facilities would be commonplace within 10 years.

"The supply chain will start to converge," said Patel, speaking at IGD's Sustainable Distribution seminar at Birmingham's National Exhibition Centre. "Collaboration will be do or die. It will be a question of keeping your friends close and your enemies closer."

Initiatives such as sharing vehicles and more efficient warehousing would help save 48M road miles by the end of 2008, equivalent to removing 800 lorries from Britain's roads, said IGD.

Tesco gave examples of its work on sustainable distribution at the event. Its sustainable distribution director Alex Laffey said: "Our target was to reduce by 50% the amount of carbon dioxide emitted by our distribution network by 2012. So far we have achieved 24% saving against our 50% targets."

Laffey said Tesco's distribution initiative had improved trailer fill and fleet utilisation by 42% and reduced road miles by 2.2M and carbon emissions by 2,900t. "We have gone from 1,200 cases to 1,700 cases per trailer."

Meanwhile Ian Hill, director of logistics at Nestlé UK and Ireland and a member of IGD's ECR unit, announced IGD's plans for an interactive website charting processors' latest work on consolidating logistics operations.

The site will provide a flow diagram enabling logistics managers to decide which tactics are best for them to adopt to cut costs and the environmental impact of distribution.

Full details, plus more industry achievements in the field of sustainable distribution, would be announced at IGD's supply chain forum in November, said Hill.

A major collaboration project involving 37 leading food and consumer goods companies was announced at the IGD Sustainable Distribution seminar. More than 16M road miles had been saved in the pilot project alone.

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