February 26, 2001, 2:55 PM — Some of the oldest and most fiscally conservative names in American industry are betting on a cutting-edge technology startup to wring inefficiencies out of their distribution networks and help them participate in the Internet economy.
Later this year, corporate giants as diverse as Agilent, Coca-Cola, General Mills, Kellogg's, Land O'Lakes, and Monsanto will experiment with a unique Internet-based, collaborative commerce application to reduce their logistics costs.
These old-line companies will use the Internet to manage billions of dollars in logistics spending by sharing excess shipping capacity among a community of invited members. The system, to be fully launched this May, could bring underutilized assets, such as container trucks, to nearly 100 percent productivity and cut out as much as 10 percent to 12 percent of a company's logistics spending.
The service, created by Nistevo, in Eden Prairie, Minn., aggregates scheduling and shipping information on its site, and then creates a mutually agreed upon "tour" of pickup and drop-off points around the country.
Land O'Lakes will share distribution information with other packaged consumer goods manufacturers and supermarkets to optimize its own shipping capacity.
"We have a plant in Kent, Ohio, which ships full truck loads of butter to Burlington, Vt. As it is now, the trucker has to come back empty," said Fernando Palacios, vice president of operations and supply chain at Land O'Lakes, in Arden Hills, Minn.