The new role of the third party logistics provider will not just be to transport and store, but rather to serve as a trusted partner in the lean journey by identifying problems, implementing solutions, and adding value in global and complex supply chains. The relationship with the third party logistics provider needs to move from transactional to one of long term partnership and commitment.
Here are five key things you should expect from your third party logistics provider. If these things aren't part of its DNA, you may encounter fundamental problems down the road.
1. First and Foremost - Results
The goal of a third party logistics provider should be to support the growing demands and complexities of its customer's supply chain and do so in fashion that results in:
- Improvement of on-time delivery to the customer (whether that's dealers, retailers, manufacturers, or consumers)
- Reduction of transportation cost
- Reduction of inventory levels
- Reduction of order to delivery lead time
- Improved freight performance
2. Disciplined, Intelligent Technology
A third party logistics provider is a partner that will bring discipline and visibility (such as proactive track and trace), to the day to day execution and technology. Technology that integrates suppliers, customers, and transportation providers serves as the platform for increased operational efficiency. A plus is when this technology is housed with that one provider and has robust reporting and analytical capabilities with all inbound and outbound data residing in one system. The provider should have a reliable IT team that can be flexible and respond quickly to daily changing supplier and shipping scenarios.
3. Appreciation and Dedication to Lean Principles
An effective third party logistics provider will recognize the value of lean principles. Businesses all around the world are familiar with the value of lean principles. The current conditions of globalization and competitive environments require operating a lean business now more than ever. Lean principles teach to eliminate waste and focus only on those things that result in customer value—ultimately building business cultures that focus on problem solving. While many companies have embraced lean in manufacturing processes, they have yet to un-tap the wealth of opportunity lean brings to the supply chain. The Lean Supply Chain is a system of interconnected and interdependent forces that operate in unison to accomplish overarching supply chain objectives. Once you have every team member empowered to solve problems every day, the results are extraordinary.
4. Collaborative Continuous Improvement and Innovation
The third party logistics provider should demonstrate an aggressive continuous improvement mindset with solutions that are both measurable and actionable. It should deliver new and proactive ideas on a frequent basis, and thought leadership in the form of supply chain vision and innovation to help the customer turn its supply chain into a competitive advantage. A great third party logistics provider will provide the services, people, processes, and technology to achieve the customer's goals. There should be a collaborative attitude between the customer and the provider, as well as an established global understanding for any future expansion opportunities.
5. Last But Not Least - Dedicated Resources
Dedicated, skilled, and experienced personnel are key for effective program and account management. A third party logistics provider should provide this and on-site presence at your facility. This person will then gain intimate knowledge of your business, your people, your processes, and your suppliers, and can serve as a liaison to deliver the customer service you expect in a third party logistics provider. The customer-provider relationship should be viewed as a strategic partnership - with both executive leadership teams engaged.
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.Facebook LinkedIn Twitter Google+