What does pooling refer to?

Pooling, also known as supply pooling, consists in grouping goods together from several industrial or commercial companies during a customer’s procurement process, sent either to one or several addresses, using optimised and therefore full trucks. The goods transit via a logistician, who then redistributes them into the trucks. Industrial companies have less stock, a precise overview of their stock levels at any given time, know their sales perfectly and can thus ensure reliable stock rotation calculations.

The various stages required for supply pooling must be conducted pragmatically, with help from a logistic provider. The latter receives the industrials’ goods, prepares them, loads them and delivers them. Rotations are designed to avoid any in-store shortages (retail space) for the end customer. By pooling logistical resources (warehouses, trucks, human and material means), lowering storage costs and ensuring better in-store presence for high-rotation goods, more profit can be generated for the stakeholders involved in supply pooling.


Compatibility of pooling stakeholders

  • Pooling companies must ensure logistical compatibility as regards their products and customers.
  • Requests must be compatible in terms of volume and timeframe. In large retail stores or certain shops, seasonality is extremely important for managing volume. Hence the notion of fixed distribution (hardly any changes in the volumes delivered) and variable distribution pooling (taking larger volumes into consideration, such as at Easter or Christmas for example).
  • Logistical organisation must always be compatible if industrial companies collaborate and use joint production resources and warehouses.
  • A project manager leads a system comprised of several different partners on various sites. That manager becomes the reference person when choosing the right solution and best logistic providers for storage, transport and IT back-office work. A third-party belonging to none of these entities will have an easier time arbitrating any conflicts of interest between partners.
  • Supply pooling projects have high ROI (return on investment), as they do not cost much to implement.

Examples and practical applications

What are the benefits of pooling?

From the industrial company’s point of view, pooled supply management significantly reduces logistical costs, including those incurred by finished product storage in the factory. For instance, companies that use 30 platforms in France and deliver about 30 pallets in 30 trips would only stop at one platform during a single trip if pooling were implemented. The company’s overall carbon footprint is also lowered. Figures show that mileage is reduced by 20%, and CO2 emissions are diminished by just as much.

There is also an advantage in terms of management, as all stakeholders have better visibility of both sales and stock levels, given that everything is located in the same place. The distributor is aware of stock levels in real time, for each product, including sales and rotations.

Pooling is also suitable for small suppliers. By doing so, they can better master their logistical costs - as the latter are pooled - and deliver to larger food or specialised retailers.

As for distributors, pooling preserves a favourable relationship with partners. Indeed, suppliers and logisticians are responsible for any goods stored within the platform. Distributors who simply choose to oversee pooling operations also save a lot on staff.

Looking at logistic providers, in addition to vastly reducing CO2 levels, logisticians win over market shares and enhance loyalty among key customer who may be drawn to competitors. 


Regulatory cornerstones for pooling

Supply chain outsourcing contract