'Collaboration between producers, retailers, suppliers and even government is the key to meeting the increased demand, which Christmas shopping brings,' David Godsell, Strategic Marketing and Development Director, told the Institute of Grocery Distribution's (IGD) annual conference, today.

Speaking at the Institute's annual convention, David Godsell said: 'Communication between all parties within the supply chain is vital. Overcoming the commercial mindset that prevents mutual dependency and open relationships between suppliers, retailers and third party logistics providers is the main obstacle the industry must overcome.' Godsell predicted logistics providers could expect to see growing demands, which would tax the industry and supply chain capability even further. With differentiation of mass retailers on the basis of value added services, there has already been continual pressure on providers to increase flexibility in managing higher frequency and smaller volume distribution.

This, Godsell argued, would only continue with trends towards product extensions, retailers offering non-food goods, extended opening hours and the rapid growth in home-shopping.

Godsell went on to state that demand could no longer be met by bolting together discrete units. 'Modelling tools, optimisation software and asset-tracking have gone some way towards pulling together the supply chain, by providing visibility and the management of forecasting and planning data.

However, what is really needed, is a significant increase in collaboration and a change in mind-set which puts the supply chain as a whole above the needs of individual parts within it.' For retailers this might mean new, more flexible collection points, such as garages, for their home delivery offering, or for manufacturers looking to design transit packaging, enabling loads to be transferred directly to shelf. For small retailers banding together to consolidate loads and achieve critical mass for commercial viability.

And for logistics companies, working hand in hand with retailers to create produce villages consolidating products within a single centre, or in-store collaboration overseeing efficient handling of the last 50 yards where stock - the up to 60 - 70 per cent of shelf availability problems lying in store.

Such collaboration is being achieved in Europe. For example at Tilburg in Belgium, competing manufacturers and retailers combine within a single Salvesen run facility, enabling stock to be transferred from manufacturer to retailer without transport movements and achieving dispatch of 250,000 cases to 850 stores from a single warehouse daily.

Godsell also called on government and industry bodies to support the move towards collaboration within the industry through initiatives such as on-line brokering to match demand with capacity and government grants for jointly funded shared-user networks.

Godsell concluded: 'If we can break through the commercial blinkers, which prohibit collaborative thinking across the supply chain, logistics providers can achieve new and improved ways of thinking, which will embrace and indeed pre-empt challenges and opportunities for retailers in meeting the demands of their customers.'