If you’re a shipper considering outsourcing the management of your supply chain to a 3PL, there are certain core capabilities you should be sure the partnership will bring before entering into it. You’ll want to know what separates one supply chain management company from its competitors. You’ll want to learn who the 3PL is at their core, determine their level of customer/employee engagement and how they plan to establish an atmosphere of trust. You’ll want a 3PL who will drive strategy and thought leadership, one who will push your business forward by proactively bringing an advanced level of service to your company.
How do you get these things?
In short, you should be asking the 3PL, “What more can you do for me?”
Supply chains are complicated and companies’ needs vary from business to business. Choosing a 3PL with strong governance and change management processes can enable them to drive value across multiple channels of the supply chain to support your strategic goals. Whether handling the entire supply chain or just certain aspects of it — the core value of continuously striving to improve the process from year to year, or day to day, becoming more involved with a customer, developing a deeper understanding of their business and thereby bringing the relationship to a partnership level — allows a 3PL to deliver process excellence that meets the shipper’s demands.
An experienced Lean 3PL will use value stream mapping and other Lean tools to evaluate the existing supply chain, identify inefficiencies and suggest a process that will advance it, and then help with the implementation and assessment process. However, it’s the ongoing management of the change that makes the difference. Working in partnership, the shipper and the 3PL should begin viewing the supply chain holistically, thereby establishing a gating process for driving a higher level of value.
Careful planning and preparation are keys to the gating process. A skilled 3PL partner will utilize a structured, change management process that works in conjunction with core Lean principles. There are multiple elements to the process, but the critical aspect is having a communication structure in place to ensure that projects get started, staffed, implemented and measured appropriately. The 3PL must advise the customer on which areas should be critical priorities (based on their experience) and therefore receive the most focus, recognizing that there may be short- or long-term areas of focus. From that point, a strategic 3PL partner will work collaboratively with the customer’s organization to develop a strategy to meet their needs.
Once the improvement roadmap is set, pertinent questions arise. What is our ultimate goal here? What data do we currently possess that can be used toward a solution? What will the value of the project be to the company? How do we measure that value? Their more detailed concerns such as, “are we making the right transportation buying decisions?” are all questions a conscientious 3PL partner will identify and seek to uncover, even in the absence of available data. They’ll help go out and get the information needed.
Finally, what resources will be necessary to implement the project? Will the customer and the 3PL share allocation of the resources, or will one side assume more of the responsibility than the other? A key point to this process is the fact that all of this is done before beginning any project. It’s simply a matter of planning up front as opposed to reacting to issues as they arise. Using the value stream mapping process helps avoid these issues, enabling organizations to gain better control of their day-to-day activities. The implementation of these communication and governance processes takes time and work up front, but it ensures positive momentum and a shorter time to value later in the engagement.
A key enabler for any successful supply chain improvement initiative is establishing a definition of success up front that includes the documentation of the “metrics that matter.” This ensures that each team understands the value proposition and has an effective means to monitor performance and measure success. These controls help keep the partners aligned, build on joint successes, and shorten the time to value delivered. The right type of 3PL partner knows how to establish this type of change management structure and make it repeatable. This is the true value that the right partnership can deliver: “help me continue to make things better.”
When you buy a suit off the rack there is a good chance you’ll incur the added expense of alterations in the future. Careful consideration of a 3PL partner whose processes are tailored to your needs will help you get a leg up on your competition and get your product to market in the most cost effective and reliable way.
Meaghan Diem is Director of Business Development at Menlo Logistics. Meaghan has more than 15 years of supply chain leadership experience, including business development, warehousing, distribution, 3PL and transportation optimization across multiple industries with a strong LEAN operations and implementation background. During her tenure with the company she spent two years as an expat in Menlo’s European headquarters focusing on supply chain solutions and business development in the region.