Econostrum | Economic News in the Mediterranean

"Doing more with less"

By Xavier Hua, managing director of ECR France

Written by Xavier Hua, ECR France on Tuesday, April 23rd 2013 à 10:33 | Read 800 times

ECR France is a joint trade and industry body for the food and non-food branches of the fast-moving consumer goods sector. Its mission is to define and promote good practice and codes of good conduct in relations between manufacturers and retailers.

Xavier Hua, managing director of ECR France. (Photo ECR)
Xavier Hua, managing director of ECR France. (Photo ECR)
Together, we can do better and do more with fewer resources; it's a 'win-win' scenario ”

Logistics-pooling projects have been developed and put into action in recent years following the implementation of the LME*. With payment terms becoming shorter, retailers needed to reduce their stock levels.  

Logistics pooling between manufacturers was seen as way of increasing delivery frequency and thus achieving this stock reduction. New logistics companies were set up, and there are currently several forms of pooling in operation. For its first pooling census, commissioned by manufacturers and retailers, ECR surveyed around 20 operational logistics pools and 30 projects, covering all product categories.  

We identified three reasons for logistics pooling in today's environment.  

First, the new demands of customers have to be met. The reduction in stock levels is a long-term trend.
The partners must be committed to finding mutual benefits: soaring transport costs (higher diesel prices, the new carbon tax and insufficient fuel volumes) for those placing the order are forcing suppliers to improve their logistics arrangements. Together, we can do better and do more with fewer resources; it's a 'win-win' scenario.  

Finally, actors along the supply chain need to anticipate changes in the market: as citizens become more environmentally aware and a company's image is increasingly important to its sales, environmental impact and noise pollution becomes less tolerated.

The more small companies pool, the greater the benefits

The smaller the companies which pool their transport or logistics operations, the greater the benefits can be, whether for transport costs or increasing commercial prospects.

Pooling removes the restrictions imposed by minimum order levels or crippling delivery costs. For some manufacturers, such as the Economic Interest Grouping (EIG) Chargeurs Pointe de Bretagne, pooling even becomes a societal benefit as it allows them to retain their regional roots.  

However, pooling is not the only way of improving the efficiency of logistics flows, and there are complications in its implementation: it requires the partners involved to share potentially strategic information, implement mutually acceptable governance and anticipate operational constraints.

* Law on the Modernisation of the Economy

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