newsworthy
then suggested changes that would cut assembly times
in half and would improve the truck loading process for
better cube utilization, all the while preserving the basic
look of the display.
The changes, which were adopted, saved the shipper hundreds of thousands of dollars, according to the paper. “But
these dollars could have been saved from the outset with a
zero investment by inviting a 3PL representative to participate in early-stage meetings,” the paper said.
The solution, according to the Kane paper, lies in more
widespread implementation of the “vested outsourcing”
model developed several years ago by the University of
Tennessee’s Center for Executive Education. Under the
model, a contract between a shipper and service provider is
structured to clearly articulate the relationship’s objectives
and the mutual rewards for achieving them. The goal is to
give the provider the freedom to determine the best way to
solve the customer’s problems. To do that, the shipper must
invite the 3PL to embed one or more of its employees at a
customer’s designated site.
“An onsite relationship manager ‘embedded’ within the
client is a good start for building a stronger relationship and
can lead to better results from the 3PL,” supply chain guru
Kate Vitasek, a major proponent of the vested outsourcing
concept, is quoted as saying in the Kane white paper.
“There’s a fear factor that must be overcome in relation to
Consulting company Frost & Sullivan has named
Manhattan Associates as the 2011 Warehouse
Management Systems Provider of the Year in Asia
Pacific. Manhattan is the first company to retain the
regional award for three consecutive years. … Nissan
Forklift Corp. has recognized Chad Lentz as its 2011
Pinnacle Sales Award winner. Lentz is the Fargo, N.D.,
branch manager of Forklifts of Minnesota in
Bloomington, Minn. Nissan Forklift also honored Brett
Levin with the 2011 Pinnacle Emeritus Award. Levin is
the sales manager for new and used equipment at
Material Handling Supply Inc. in Brooklawn, N.J. …
HOM Furniture, one of the nation’s largest furniture
retailers, has honored two team members from
Associated with its 2011 Service Representative of the
Year Award. The recipients were Kevin Bjick, field service manager, and Ron Holm, field service technician.
Associated is a specialist in integrated supply chain
solutions. … Mars Petcare has awarded its first-ever
Carrier of the Year award to Eleets Transportation. …
Swissport International has received India’s STAT Times’
International Award for Excellence in Air Cargo, which
recognizes quality in global cargo handling services.
accolades
sharing forward-looking plans. But companies that have
invested to become more strategically and structurally
aligned with their partners are seeing the benefits of that
investment.”
ROADBLOCKS TO CHANGE
Shippers may say they want their 3PLs to offer innovative
solutions, but as David Howland, vice president of land
transport services for APL Logistics, has seen, the shipper’s
own organization often resists the kinds of changes 3PLs
propose.
Howland once suggested to a customer, a U.S.-based
manufacturer, that it could save about $300 per southbound container by utilizing a new route that linked Los
Angeles and Mexico City through Mexicali, located near
the U.S. border and a relatively short hop from Mexico’s
capital city. No longer would the customer need to use the
traditional southbound gateway of Laredo, Texas, which
would require a circuitous move east before heading into
Mexico.
But Howland ran into a roadblock trying to convince the
shipper’s Mexican employees to execute the strategy
because it resulted in a change in the way traffic would be
cleared and handled once it entered Mexico. After much
back and forth, he brokered a deal where the two geogra-phies would split the $300-per-container savings.
Howland said APL Logistics’ strategy could have been
implemented more quickly and cleanly if he could have
proposed it to the customer’s top executives instead of
going through the shipping department. And it is not an
isolated case, he said. Many traffic departments are resistant
to change because it could impact their jobs and, in
Howland’s words, “disrupt their world.”
In an e-mail to DC VELOCITY, Howland said, “We had to
find a way to break through their current thinking to find a
way to satisfy all parties.”
Third-party logistics executives know that when it comes
to these types of situations, they need to tread lightly for
fear of angering the customers that are their bread and but-
ter. “Why would I question the customer’s motives?” asked
Jim Butts, senior vice president of C.H. Robinson
Worldwide Inc., a major 3PL. “Our customers are really
smart and they make rational decisions. We have to assume
that what they do in this area is a rational decision.”
Butts surmises that shippers may not want to let 3PLs get
too close out of concern that they will lose the objectivity
that comes with being a third party. He also said the reason
may be as basic as “us not being welcome in someone else’s
organization, because it is someone else’s organization.”
Still, Butts doesn’t believe 3PLs like C.H. Robinson are
left out in the cold with virtually no visibility into the
strategies of their customers. “I don’t think we are on the
outside looking in,” he said. ;
