Logistics Outsourcing
Although LeanCor strives to be the logistics partner for our customers, there are times when this does make sense. However, LeanCor is still committed to ensure that all Third Party Logistics (3PL) relationships succeed. Developing a successful 3PL relationship requires vision, trust, planning, knowledge and a lot of hard work. From deciding what should be outsourced to choosing a 3PL, to understanding how goals will be met, LeanCor will ensure that expectations are realistic. Furthermore, we ensure that expectations of all supply chain partners are realized.
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Logistics Outsourcing
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Outsource Vision Generation
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Core Competency Analysis
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Key Outsource Process Identification
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Make VS Buy Analysis
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RFI / RFQ Development
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RFQ Management
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Contract Management
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Implementation Planning
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Implementation Project Management
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Outsource Relationship Measurement
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Continuous Improvement Development
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Choosing a third-party logistics (3PL) company is a serious strategic sourcing decision. In most cases, when a company considers outsourcing to a 3PL, it is making a decision to hand over a piece of its business to the 3PL. This decision has lasting impact, as the 3PL will have direct communications with the organization’s suppliers and customers. This direct contact means the 3PL will be an agent for the organization. As an agent, the 3PL must share the same values and customer service principles as the organization itself.
The third-party logistics industry is growing at a pace of nearly 15% per year. Unfortunately, as new 3PL relationships are born, existing 3PL relationships are disintegrating in a milieu of failed promises. These failures tend not to be the fault of any one party, but rather they are the result of poor planning and lack of efficient strategies. The main reasons that these relationships are doomed from the start are:
- The customer did not give accurate information from the beginning, which resulted in the 3PL unknowingly under-pricing the contract in the initial proposal.
- The 3PL was so eager to get the business; it did not consider all cost and operational components and therefore under-priced and over-promised.
- The customer thought all aspects of the logistics function could be left to the 3PL.
- The 3PL took on the new business without the resources to implement and operate the account effectively in the long term.
- The customer did not set expectations, standards, and measurements to define success in the relationship
- The 3PL did not listen for or document the voice of the customer and consequently did not understand the customer’s requirements or expectations.
- The 3PL had no formal continuous improvement infrastructure in place, which resulted in a stagnant relationship after the initial start-up phase
- The relationship was based solely on cost-reduction goals, which are virtually impossible to calculate, confirm, or deny after the operation begins.
When we review this list, it is apparent that many 3PL relationships begin for the wrong reasons. Successful business relationships do not live and die by cost reduction. The successful relationship is driven by common goals, shared vision, and complementary expertise.
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