The term “Vested Outsourcing”—a method of contracting for services that eschews the traditional pay-per-transaction model in favor of rewarding the vendor for outcomes—is by now familiar to many supply chain professionals. But “Vested” is not just for logistics outsourcing. As a new book makes clear, companies are successfully applying the concept to many different facets of their business relationships.

Written by Kate Vitasek of the University of Tennessee and Karl Manrodt of Georgia Southern University with Jeanne Kling, the book is titled Vested: How P&G, McDonald’s, and Microsoft Are Redefining Winning in Business Relationships. As the title suggests, it looks at how these companies as well as government agencies, small businesses, and nonprofits are applying the Vested model to their business relationships.

Five of the chapters are devoted to case studies that show how a company implemented one of the five core principles of the Vested concept: prioritize outcomes, not transactions; focus on what you want from a partner, not on how it is achieved; establish clearly defined and measurable desired outcomes; set a pricing model with incentives that foster a win-win scenario; and establish a flexible governance structure that embraces change and improves business insight. The final chapter looks at how and why those rules have helped organizations of all types and sizes.

The book, published by Palgrave MacMillan, is scheduled for release in September. For more information, go to www.palgrave.com. ; New book features “Vested” success stories

An ocean carrier’s reliability is measured on whether its ships arrived in port according to published schedules. But just because a ship is at the dock on the right day, that doesn’t mean containers will reach consignees on time.

A new report from the Inttra e-commerce network for the ocean shipping industry and SeaIntel Maritime Analysis, a provider of container shipping industry analysis, documents and quantifies the gap between vessel arrival and container delivery reliability. The most egregious case was the Europe to Australia/New Zealand trade lane, where vessel reliability for direct service is 88 percent, but on-time container delivery is only 36 percent—a whopping 52 percentage-point difference.

Overall, vessel on-time performance averaged 81 percent globally. On the world’s busiest lanes, the Asia-to-Europe and Asia-to-North America trades, container delivery was 8 to 10 percentage points lower than the vessel reliability.

The researchers conducted trade-lane analyses that compared vessel arrival reliability, based on SeaIntel’s measurements, with the actual container delivery reliability, based on Inttra’s data. They looked at close to a million container-status messages processed daily by Inttra, representing more than 18 percent of the world’s total container shipments.

For info on how to obtain the full report, visit www.seaintel.com. ;

Ship’s in, but where’s my container?

inbound

Amazon’s new DCs:
Coming to a city near you?

A few months ago, we reported that Amazon had set up a recruiting booth at the Warehousing Education and Research Council’s annual conference. At that time, Philip Dana, the company’s talent acquisition manager, told DC VELOCITY he was looking to hire 5,000 warehousing professionals.

He may have to up that number considerably. According to a recent report in the online magazine Slate, the retail giant has committed to building or leasing new DCs in at least six states, including New Jersey, Virginia, Tennessee, Indiana, Texas, and California. The company is expected to hire 10,000 new workers in California alone over the next four years. Amazon already has 34 warehouses and DCs in North America.

A number of states have passed laws that imposed sales taxes on Amazon’s business, and the company had fiercely resisted those mandates. But according to Slate and a series of reports in the Financial Times, Amazon has done an about-face and has signed agreements to collect sales taxes in some of those states. Why? By agreeing to collect sales taxes, Amazon can legally open warehouses and DCs in some of the nation’s most heavily populated areas, says Slate’s Farhad Manjoo.

So why is Amazon suddenly so eager to build DCs in states where it previously did not want a physical presence? Many observers believe it has to do with Amazon’s plan to make overnight delivery standard and offer same-day delivery for an additional fee. Amazon can only achieve that level of service by locating more warehouses closer to large population centers and by making its warehouses hyper-efficient. (Cue the Kiva robots …)