Perhaps a giant customer has squeezed the financial life
out of a desperate supplier. Sometimes no one figures out
that customers might be put off by having complaints handled by someone in another land who has no clue about the
importance of a relationship between a business and its
customers.
It is possible that a bad contract has been written; the
prospects for this increase exponentially when lawyers
make the decisions rather than simply offer counsel and
risk assessments. Not infrequently, a company fails to
understand the magnitude, complexity, or mission-critical-ity of what it is planning to outsource.
And sometimes, sellers lead buyers astray.
GYPSIES, TRAMPS, AND THIEVES …
No slur intended; just borrowing lyrics from a song by
Cher.
But here’s a reality check. Not every peddler of outsourced services is competent. And not every buyer has a
clue as to how to evaluate and qualify a potential service
provider. When the buyer is under-informed and the seller
is unscrupulous, a bad marriage is 100 percent predictable.
And the Kim Kardashian solution of walking away with
millions is not an option.
Actually, our belief is that the overwhelming majority of
service providers in our supply chain world are honest and
capable, hard working, and creative on behalf of their customers. And most buyers of outsourced services have decent
intentions, even if not all the experience they might need.
But during difficult economic times, otherwise dependable people might make less-than-the-best decisions under
stress, and salespeople with targets to meet and families to
feed might be over-optimistic in their commitments. Even
in good times, to be blunt, those service providers in which
investment firms and venture capitalists have significant
equity stakes face enormous pressures to drive top-line
results and deliver bottom-line outcomes.
WHAT THE FUTURE HOLDS
So, does all this mean that the established LSP industry is
facing decline? Are these developments fatal threats? Our
opinion—absolutely not!
What this does mean, though, is that the solid organizations in the field have a golden opportunity to differentiate
themselves by defying the stereotypes. Under-promising
and over-delivering, rather than the other way ’round.
Helping the confused, or inexperienced, buyer find the
right path, rather than making the biggest, fastest sale pos-
sible. Showing the potential customer where the risks and
potholes in the process lie.
We understand that this may be counterintuitive to people whose only known talent is to make the one-time sale.
It will make loads of sense to those who understand that the
value of a 20-year business relationship is phenomenally
greater than the margin on one sale that won’t be repeated
because the ship has run aground.
This is especially important if one believes, as we do, that
the scope and extent of outsourcing will continue to grow,
particularly in an economy that will remain globalized,
even with in-sourcing, in-shoring, and other supply chain
redesign initiatives. ;
Art van Bodegraven, practice leader at S4 Consulting, may be reached at (614)
336-0346 or avan@columbus.rr.com. You can read his blog at http://blogs.dcve-locity.com/the_art_of_art/. Kenneth B. Ackerman, president of The Ackerman
Company, can be reached at (614) 488-3165 or ken@warehousing-forum.com.
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