7 Tips for Global 3PL Sourcing & Implementation Success

Selecting the right-fit contract logistics provider(s) is a crucial decision with lasting customer impacts. Third party logistics (3PL) or Contract Logistics is defined as outsourcing all or much of a company’s logistics operations to a specialized company. Activities might include global supply chain design and planning, facility design, warehousing, transportation, distribution, inventory management, returns (reverse logistics) and defective repairs. Industry providers include freight forwarders, couriers and other specialized contract logistics providers.  Global Sourcing organizations and business unit leaders should not be content with the “lowest” bidder. While cost drives most sourcing decisions, other important factors to consider in a Total Cost of Ownership (TCO) analysis should focus on engaging a logistics partner who consistently acts in their customer’s best interests, raises awareness about global risk reduction opportunities and fosters responsive customer interactions across all levels.

Fostering win-win 3PL relationships is rare given intense global manufacturers cost pressures and outdated contracting relationships. However, contract logistics providers make a virtual handshake to their customers’ customer when delivering products and services, so supplier selection should not be about cost alone but how building a solid relationship can be a conduit to win kudos and increase loyalty with your customers! An example of a customer I worked with to implement a global 3PL across the Americas, EMEA and APAC regions received this flattering customer feedback from one of their important customers …“Working with your company we receive the fastest spare parts replacement service in the industry”.

7_Tips_3PL_Sourcing_Implementation_Success_GraphicSupplier Selection Drivers Although Key Performance Indicators (KPI) will vary by industry, the below criteria can serve as a framework to objectively rank contract logistics providers to address the requirements of many logistics outsourcing efforts.  Developing the evaluation framework before developing the short list of candidates is important to ensure the team gives adequate consideration to desired outcomes, improving performance and closing existing business process gaps without bias toward certain suppliers or technologies. Continue reading

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Value Stream Mapping; Streamline Workload without Sacrificing Headcount or Quality

Looking to streamline the workload in your organization but having trouble deciding where to begin? Many organizations find the thought of reducing workload intimidating or down right scary as these changes could result in downsizing or quality problems. I couldn’t disagree more with this line of thinking. In fact, the moment an organization ties improvement initiatives to downsizing is the moment they lose credibility with their workforce or other stakeholders. Here is a starting point with a few questions to ask yourself and ideas to get your creative juices flowing about where to begin your improvement efforts…

  1. What are the bottlenecks or emergencies that are occurring in my operation?
  2. In the eyes of my “end customer”, how could I provide better service?
  3. How is my current situation preventing me from accomplishing critical objectives?

Begin with a Value Stream Map (VSM) of a workflow and drive kaizen to reduce overall lead time.

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Creating Workplace Problem Solvers

When faced with problems in the workplace we have a choice of doing what we always do, doing nothing or changing the way we go about finding solutions. Making incremental changes can bring about progress in individual and team problem solving efforts and create a more effective organization.

Support Decisions with Objective Data

Challenging problems in the workplace can stimulate a variety of emotions in people from excitement to discontent which can lead to overlooking important facts and stifle optimal outcomes. Ask for supporting data and objective facts when individuals or teams are tasked with solving important business issues. Developing even preliminary data findings provides an opportunity to ask probing questions, validate information and formalize data driven recommendations.

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