is unlikely to be seamless. The keys to getting past these
issues are to avoid becoming fixated on short-term cost savings, and to select an LSP that can react quickly when things
don’t go quite to plan.
For instance, a study conducted by Georgia Tech showed
widespread dissatisfaction with 3PL technology services
within the user community. This could result from the still-too-common practice of users squeezing the absolute lowest prices out of their LSPs. How much creativity—or leading-edge technology support—can they really expect to get
for free?
So how do you get off on the right foot when bringing an
LSP on board? Here’s a sequence of steps that can get you
off to a good start:
Rough-cut the likely scope.
Test probability; apply sanity checks to the first effort.
Do the best you can to get your arms around the possible benefits.
Select the five to nine candidates most likely to meet
your immediate (and next five year) scope of need; get
advice to find the right fit of players (don’t forget to look at
where the business is going).
Decide early what the show-stopper and nice-to-have
issues are—and do it systematically.
Prepare/send/evaluate requests for information.
Proceed with the request for proposal process with the
three top candidates.
Once you’ve reached this point, continuing with an
organized approach—a methodology, if you will—can be
the key to successful implementation and achieving LSP
outsourcing objectives. Among other things, that means
providing the candidates with the information they need to
make informed proposals.
Beyond that, it is also the customer’s responsibility to provide good data and hide nothing, to keep contracts simple
and clear, and to establish flexible performance targets. In
addition, it’s important to know the real costs on both sides,
to get to know the people, and to find and resolve misconceptions early. Finally, the customer must see to it that a
problem resolution process is established at the outset.
With these steps, success is more than a possibility—it is
likely.
Editor’s note: Useful information about outsourcing and
third-party logistics service providers may be found at
www.3plogistics.com.
Art Van Bodegraven, partner at The Progress Group, may be reached at (614) 336-0346
or avan@theprogressgroup.com. Kenneth B. Ackerman, president of The Ackerman
Company, can be reached at (614) 488-3165 or ken@warehousing-forum.com.
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