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FIND SOLUTIONS WEB_CITE CITY ® MODES & SERVICES October2007 | Commentary | 3PLLine

SixEssentialStrategiesforSelectinga

Global3PL

ByJohnA.Fitzgerald ?
ByJohnA.Fitzgerald
?

Tags:3PL

Today'scomplexglobalbusinessenvironment­withitsrapidlyadvancingtechnologies,

emergingworldmarkets,andvastlyextendedsupplychains­placesincreasinglycritical

decision­makingdemandsonlogisticsprofessionals.

Inaworldgoneglobal,thechallengesofprovidingseamlesssupplychainsolutionsacross

geographicalandculturalboundarieshaveincreasedexponentially.

Overalllogisticalrequirements,vendorchoices,andotherdynamicvariablescanmakethe

outsourced3PLdecision­makingprocessanexercisefraughtwithpitfallsifnotconducted

carefullyandcorrectly.

Compoundingthesituationisthefactthatglobalthird­partylogistics,drivenby

increasinginternationallogisticscostfactors,isestimatedtobea$390­billionindustry.

Thereisnoindicationthenumberofplayersprovidingtheseserviceofferingswill

diminish.

Thismakespartnershipdecisionsforshippersevenhardertograpplewith.

Withthesecaveatsinmind,herearesixcriticalessentialsofglobalsupplychainstrategy

youshouldweigh,analyze,andconsidercarefullybeforeselectingyour3PL.

Keepinmind:the3PL'spriceisseldomtheonlyselectioncriteria;youmustalsoconsider

totalsupplychaincosts.

1.Culturalalignment.Thebiggestchallengesshippersfacetodayarecontrolling

internationalsupplychainvisibility,leadtimes,andtotallandedcosts­including

inventorycarryingcosts,obsolescencecosts,andcustomerservice.

So,selectingathird­partylogisticsproviderbestsuitedtomeetingtheirspecificand

uniqueglobaldistributionneeds,bothculturallyandoperationally,iscritical.

Everyshippershouldask:"Doesmycompanyandthe3PLwewillworkwithsharethe

samevalues,suchasethicsandresponsibility;andcanweunderstandandagreeupon

whatthespecificnatureofthepartnershiparrangementwillentail?"

Ifthetwopartiescannotagreeonthesepoints,therestofthecriteriabecomemoot.

2.Companyinfrastructure.Withglobalizationandnewtechnologies,itiscriticalthat

bothpartieshavethephysicalresourcesandaccessibilitytoshipmentdatatomeeteach

other'sneeds.

Intheageofcustomizedone­to­onemarketing,supplychainsolutionsbecomeallabout

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personalizedservice.Ifthetwopartnersdonotsharecommoncapabilitiesandcompany

resources,a3PLwillnotbeabletoprovidepropersupplychainvisibility,andtheshipper

willnotobtainthenecessarycapacityandserviceswhendeliveryofgoodsisrequired.

IfyousourcefromIndia,forinstance,doesthe3PLhaveitsownofficesintheregionto

workwithyoursuppliers?

3.ITcapabilities.ITcapabilitiesworkhand­in­glovewithcompanyinfrastructure.If

theshipperand3PLcannotcommunicateontheoperatingplatformstheyalreadyhavein

place­whetherEDI,XMLortheWeb­andberesponsivetoeachother'schangesinIT

structure,itislikelytheywillnotbeagoodmatch.

Real­timedatasharingandongoingtimelyresponsivenessiscrucialtoprovidinga seamlesssupplychain.ITcompatibilityisessentialforprovidinggloballogisticsservices suchasshipmentdocumentation,purchaseordervisibility,cross­dockingsupport,and advancedservicesincludingforecasting,inventoryreplenishment,andlifecycle

management.Howfastcanthe3PLrespondtoITrequests?

4.Easeofdoingbusiness.Asupplychainpartnershipwillonlybeasgoodastheskills

andcooperationitsparticipantsbringtoit.Howflexibleiseachpartnerwillingtobeon

itemssuchasexceptions,scheduling,andservices?Ifthesupplychainistobeoptimized,

it'simportantthatbothpartnersworktogethertoempowerallparticipants.

Athird­partylogisticsproviderthatisrightforyouwillcustomizeservicestomeetyour

specificsupplychainneeds.Butitisessentialthatshippersworkcloselywiththeir3PLto

sharecriticalshipmentandforecastinformationthatwillenhancevisibilityandhelp

optimizethetotalvaluechainprocess.

5.Metrics.Costisalwaysimportant,asthesuccessofanysupplychainpartnership

ultimatelyrelatesbacktocustomersatisfaction.Thismeansthatyouandyour3PLpartner

mustestablishagreed­uponbenchmarksforsuccess,andfrequentlyreviewmeasurement

datatoascertainifthegloballogisticsprocessisperformingwellorneedsimprovement.

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Thisprocesscaninvolvemeasuringon­timeperformance,damages,cost­per­touch,total

landedcosts,andothermetrics.Yourmetricsshouldbethe3PL'smetrics.

6.Partnershipintangibles.Value­addedcustomerservice­relateditemscanbefurther

enhancedifbothpartiesareableandwillingtojointlyinvestintheircommonsuccess.Itis

vitalthateachpartnerfullyunderstandthemeaningof"globalcollaboration."

AsglobaltradeandITcapabilitiesaccelerate,andtradecomplexitiesincreasewithnew cross­culturalregulations,itbecomesevenmoreimperativethatyougivegreatcareto

choosingaglobal3PL.

Selectingtherightsupplychainpartnerforyourspecificdistributionneedswill

dramaticallyenhanceyourworldwidesupplychainmanagementresults.

?