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Executive's Edge Newsletter

COLLABORATION, COOPERATION, AND COUNTER-CULTURE

Amazon has done an outstanding job of growing scale and leveraging this growth to achieve world class logistics. We believe that Collaboration is the key to an Amazon alternative online order fulfillment strategy, within the four walls of the Fulfillment Center (FC) and Final Delivery.  Without collaboration, no single company can get anywhere near the scale (the volumes within the Get Local FC to justify automation or the density of final delivery) required to provide cost-effective, and service-effective, eFulfillment.

The message I have been stating is very clear,

“Retailers and Brands have three eFulfillment choices in the United States:

  • Work for Amazon
  • Go bankrupt or
  • Collaborate

No other options exist in the U.S. due to the tremendous job Amazon has done with their eFulfillment scale.”

Let’s explore Collaboration a bit.  Collaboration occurs when two or more companies work together and share knowledge and information, resulting in improvement for both.  A concept often confused with Collaboration is Cooperation.  Cooperation means that two or more companies are doing something together, only receive some benefit, but neither really improves.  This is why we advocate Collaboration – the operational benefits are achieved, plus the collaborators gain the mutual improvements.  Each gets better, and the Collaboration delivers increased value to each.

The reality is that neither collaboration nor cooperation has yet to be incorporated in the business or operational strategies of the vast majority of companies.  In fact, both are “counter-culture.”  Neither companies, nor their executives, are rewarded for collaborating or cooperating, and may even be criticized for it.  Others may be overly concerned about Anti-Trust or Robinson-Patman legal regulations.  These factors are reasons why good ideas such as “horizontal collaboration” in freight operations have not taken off, despite the clear value propositions.  

We believe strongly that the growth and dominance of Amazon has changed the game for Retailers and Brands. As more store closings and bankruptcies occur, more retailers and brands will realize that collaboration will be their only true solution, aided by “smart logistics,” which is also delivered by Collaboration. Some – those who are especially risk-averse and “wait and see” oriented – may start with cooperation, then upgrade later.  But the early adopters will gain competitive advantage by being enabled first with “high-service, low-cost” order fulfillment, and realizing the long-term benefits of improving together.

Gene Tyndall, President of MonarchFx has said:  “As we have organized some of the best service providers in the industry into The MonarchFx Alliance, and are facilitating their Collaboration, we are very confident that MonarchFx will enable “smarter logistics,” powered by world-class technologies, to benefit Sellers and consumers.”

The MonarchFx Alliance is built on, and executed by, collaborative service providers.  As collaborative Sellers are brought on board, operational costs will lower, as well as capital investment, and they will share in the benefits of scale. This is the future of online order fulfillment.

To learn more about The MonarchFx Alliance, you may also watch my short 4 minute video for further insight.


Best,

James A. Tompkins, PhD.

James A. Tompkins, Ph.D.
CEO, Tompkins International

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