I apologize for the extended length of time since my last post! I will make it up through some additional posts to cover my thoughts over the next week.
I’ve been thinking, and reading, a lot lately about the 3PL market and the varying levels of 3PL partner capabilities. In addition I’ve also been reading about challenges with collaboration and integration efforts as they are related to developing a 3PL relationship. As I mentioned in an earlier post, I believe that we are entering into a shift in both the capabilities, and more importantly, expanded expectations of 3PL partners. This shift will further differentiate the ‘full service’ Supply Chain Outsourcing partnerships that you can develop with a 3PL ‘partner’ and the 3PL ‘provider’ that simply acts as a service provider.
This shift is being brought about by some rather fundamental, and in some cases, drastic shifts in expectations and practices in this market. Don’t get me wrong, I believe there will always be a place for the basic service ‘provider’ that will provide simple value add services or extended storage capabilities for seasonal fluctuations. These shifts will be focused in the ‘full service’ providers that provide extended capabilities and focus on developing the partnership with their clients. This is also the area where you can gain the greatest value, long term, and strategic, value in the relationship.
Developing a strategic, long term, partnership requires the greatest effort, but the potential benefits can make up for the effort and the risk. The greatest benefits will be gained when both parties enter into the engagement with a desire to develop the partnership. This means that each party must have the opportunity to gain from the partnership, remember your focus is on the long term benefits of the relationship and not short term, one sided benefits. This can be very difficult in the current environment that is focused on short term gains.
The first step to a successful partnership is collaboration. This can be extremely difficult in the beginning and you should look at this objective as a journey to help you maintain your focus.
The second step to developing a successful partnership is measurable and challenging service level agreements with key performance indicators help you maintain the service levels.
The third step to developing a successful partnership is a mutual performance improvement program to help you to institutionalize your improvements in a sustainable program.
My next posts will focus on these three success factors to developing a successful partnership.
Now for the audience participation portion of this program……
How would you define your relationship with the Third Party Logistics Provider? Is it a traditional customer / vendor relationship that focuses on one-sided benefits and short term objectives? Or, is it based on a partnership that provides mutually beneficial benefits and long term objectives?
Do you see organizational benefits and opportunities to improve based on the partnership relationships that I describe above?
If you see the benefits to this type of relationship, will you be taking steps to implement this type of relationship?
Would you say that your focus is long term and strategic, or short term and tactical?