In the supply chain I think that the ultimate collaboration partner is probably the third party logistics provider. Even though companies engage the third party logistics provider in a monetary contract, the value provided by the partner should be used as a model for developing your collaborative partnership network. Since the recession I think that the value and capabilities provided by the third party logistics provider has increased dramatically to support the additional demands placed on today’s supply chain. The leading third party logistics providers bring with them the relationships and best practices they have developed over the years to provide a value model that is really difficult for all but the largest companies to meet.
I see the third party logistics providers providing the beginnings of the same values that supply chain software vendors were bringing to the market and their customers in the 1990’s. That was when the software vendors reached a point in their capabilities that customers started having a difficult time justifying their own custom development of software to support their supply chain. That was also the time when the global extended supply chain reached a level of maturity and required a robust software solution to support the growing and expanding needs.
I see the third party logistics providers as the next generation in supporting the growth and expansion of the extended supply chain. The leading third party logistics providers add to the supply chain software solutions another layer of services, integration and relationships with service providers that is costly and difficult to develop on your own. Since the recession, cost cutting and reductions in force have diminished the capacity of many companies to develop the capabilities to support the growing needs of their extended supply chain without the help of supply chain service providers. The issue with engaging specialty consulting providers to design and develop solutions to support the business need is that the business must then provide the ongoing support and improvements.
The leading third party logistics providers combine the software, services and even the logistics network to meet the needs of their customers and in addition provide the ongoing support and improvements as part of the standard agreement. The leading providers have engaged the talent that was jettisoned from companies during the recession and combined this with the software and logistics providers relationships into a compelling value added package. This, I believe is the next level of services that most efficiently supports the needs of their customers. This development will continue to drive the question - Why should we develop and implement the capabilities ourselves when we can engage a partner that has already put the services together into a cohesive package? This will allow your company to focus on the areas that you excel in and make your unique while collaborating with a partner that specializes in supply chain services to bring world class capabilities to support your extended supply chain needs.
And now for the audience participation portion of the show…
Have you evaluated your partnership network to identify how together you can mitigate and reduce business? What factors and questions do you incorporate in evaluating and selecting partners for your collaborative network? How can you incorporate your partnership network to help to mitigate risk? Are you open and have your offered to support your partners in mitigating their business risk?