Shipper-3PL Relationships: What We Found in the 2015 State of Logistics Outsourcing Report

In a recent third party logistics study entitled, "The State of Logistics Outsourcing," a section of the report discussed "Aligning 3PL Relationships." In discussing their logistics outsourcing, shippers that participated in the study indicated whether they identified their organization "a strategic or tactical buyer of 3PL services, or some combination of the two."

Turns out, "43% consider their organization to be a strategic buyer, 37% to be a tactical buyer, and 20% to be a combination of both."

The study noted that in the case of strategic relationships, shippers consider 3PLs as important players in their overall business strategy and goals. 

But...

"...Their management of the relationships with 3PLs generally focuses on more tactical/operational elements rather than strategic elements."

For a 3PL partner to play a strategic role, it must move beyond the role of just transporting and storing. Rather, it must proactively identify problems, implement solutions, and add systems-wide value.  

The 3PL must guide the shipper in shifting its management system to better reflect the role supply chain plays in the business.

And it all starts with decision making between the two partners.

Facilitating supply chain-centric decision making, Supply Chain Advancement (SCA) is a business methodology that  drives improvements in all parts of a business by focusing on supply chain performance and maturity. These decisions are made in all parts of the business; including Business Strategy, Product Life Cycle Management, Sales and Marketing, and Order Fulfillment.

The shipper and its 3PL partner should re-evaluate:

  1. Business Strategy: What is our core purpose? What value do we create?
  1. Product Development and Life Cycle Management: What products and services do we need to develop to deliver that value?
  1. Sales and Marketing: To what people in which markets through what channels are we going to sell these products and services?
  1. Order Fulfillment – Supply Chain Management: How are we going to fulfill orders for these products and services?

All of these decisions will have intended and unintended consequences with varying levels of complexity. Therefore, the two parties should ask, "How will this decision add value or create complexity and waste in the supply chain?"

When the 3PL is involved in this decision making, the supply chain becomes a driving force in the business. Shippers are better positioned to deliver the highest customer value at the lowest total cost, and outperform their competitors along the way.

 

Posted by LeanCor Supply Chain Group

LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.

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