Long term relations with 3PLs

Rings

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The characteristics of logistics suppliers can be very different, which is good because the diversity in fact enriches the offer in the market; nevertheless, that diversity provokes that election of a new third party logistics turns complex because is hard to match the necessities of customers with the proposal of suppliers, which is by the way one of the most common reason to “break” the relations between customers and 3PLs.

Anyway, I consider that is possible to reach good negotiations that guarantee long term relations if you are methodic during the process. These are the five steps that I suggest to make it happen.

Define

In all strategic planning the definition of project is essential to start working. What do we have to define?

  • Mission, Vision y Objectives. Where do we go, how it´s going to happen, who are we going to become after the plan launches.
  • Which are the processes that are going to be outsourced, which are the responsibility limits of parties involved are the main questions to be applied.
  • Very important wondering if necessities of clients are covered by the offer of suppliers. The development of questionnaires is a good idea. Keep in mind besides that it´s much more important say no but leave an open door than say yes and close the doors forever
  • I talk about people. Involve the actors of project with no limits to invite just logisticians; engineering, production, finance and other departments are vital to understand the whole business

comunicación

Planning

Establish the processes to deliver the outcomes expected and express it as an “implementing project“ including a detailed description of steps to follow, committed dates and responsible. Monitor continually the progress of plan. Robinson (2013) says that the implementing project is the translation of ideas into actions. It requires active cooperation and collaboration from both sides in the relationship. Amend the plan the necessary times until being satisfied.

Plan

Act

This is the step that I would call “the point of no return”. While you are operating with a 3PL, the expectation number one of customers is that its suppliers become a solution, not a headache. To listen to a supplier arguing pretexts instead solutions is frustrating, to do that means lose customers” Rodríguez (2015).

The problems are always there, the difference is how they are resolved. When a supplier or customer wants to be heroes instead sharing problems, failure is close. Communication is the key; this simple and cheap component of human and business relationships can change the outcomes for benefit if you use it effectively or for bad if it is ignored.

Problems quote

Evaluate

Design efficient systems to measure the performance of operation and reporting methods that supports the pursuit of business goals. The results must be measured quantitatively and qualitative in a regular basis (Robinson, 2013). Commonly, the Key Performance Indicators (KPI) is determined based in objectives set at the beginning of process.

In Catalano´s opinion (2012), despite the majority of KPI is tied to execution, you should not ignore those metrics where a shared responsibility exists where the good performance of both entities can create a strategic advantage for relation. She summarizes the spirit of this step in three actions: “Think end-to-end, track performance and recognize the outcome”. In addition, she suggestes to customers to pay suppliers for results, not just for activities. As I always say, efforts without results don´t worth.

Improve Continuously

The word kaizen means “the good change” as we have talked in other post. This is one of the main methods to make changes suggested by lean manufacturing philosophy which objective is to eliminate wastes, or no value added activities. In combination with gemba, which means “the real place” and is interpreted as going to the place where the process is running to understand it and act accordingly meeting clients and suppliers in the “battle field” to build together improvements or changes to keep an “affective” relation.

This process is cyclic; the infinite repetition is the key. When this process is stuck or run slow, the relationships tend to deteriorate or break; so take care of them and feed this relation with respect, mutual understanding (win-win vision), communication and collaboration.

Again, thanks for reading! Until next one!

Foto perfil Soy Logístico

Alan Rodríguez

https://mx.linkedin.com/in/alanrodesp

https://twitter.com/AlanRodEsp


This blog supports and is supported by: http://soylogistico.org.mx/


Sources

CATALANO, Deborah. (2012). Gaining more from 3PL relationships. Inbound Logistics. Recuperado el 12 de marzo de 2016 de http://www.inboundlogistics.com/cms/article/gaining-more-from-3pl-relationships/

ROADHES, Don. (2015). The kaizen approach to SEO. 03 Creative. Recuperado el 13 de marzo de 2016 de http://www.weareo3.com/notebook/kaizen-approach-seo/

ROBINSON, Adam. (2013). 3PL implementation steps part 1: where to begin. Recuperado el 13 de marzo de 2016 de http://cerasis.com/2013/03/26/3pl-implementation/

RODRÍGUEZ, Alan. (2015). How to lose a customer: 5 tips for logistics suppliers. Recuperado el 13 de marzo de 2016 de http://alalogistics.org/2015/06/13/howtoloseacustomer-5tips-logistics/

RODRÍGUEZ, Alan. (2015). Saying “no” to waste – Step 3: Developing a ”continuous improvement” culture. Recuperado el 13 de marzo de 2016 de http://alalogistics.org/2015/09/02/saying-no-to-waste-step-3-developing-a-continuous-improvement-culture/

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