The Oxford English Dictionary defines the word ‘logistics’ as, “The detailed organization and implementation of a complex operation.”
Now I think you can agree that the ‘organisation’ of any ‘complex operation’ has its fair share of challenges but then to have to implement it that’s another story.
Imagine it is your child’s 5th birthday and this year they have asked for farm themed party. Them, being your little pride and joy you don’t want to disappoint, so you rent a farmers costume, make a scarecrow, hire a petting zoo including pigs, goats, lambs, chickens and even a cow. The house is decorated and the invites sent and you are extremely happy with yourself.
It then dawns on you, the morning of the party that the real challenge is about to begin. Your 3 bed semi with an averagely sized garden is about to be overrun with 20+ over excited children fuelled by sugar from the vast amount of party food that you bought and will no doubt be eating for days to come. Not forgetting a pack of farmyard animals! Where will they all go? Will the farm send enough helpers? You hope that little Andrew from down the street doesn’t pull the goats beard again causing a ‘Jumanji’ style stampede through your newly decorated home!
In the beginning…
At one time companies big and small handled their own distribution. From local delivery vans serving the local community, to big companies running their own distribution divisions operating supply chains individually.
It’s still happening but the overriding route of choice for most organisations nowadays is to outsource to the specialists and to rely on these specialists to ensure that products get where they need to be in the right condition on time every time. They can then focus their own resources on what they do best, their own specialism, and their core business.
BUT if it’s the wrong choice of support the implications can be of ‘Jumanji’ proportions!
Choosing the right 3PL partner is one of the most critical business decisions that an organisation can make. It can impact on client relationships, client retention, product quality, and ultimately and most crucially the bottom line.
Today’s 3PL’s are no longer just suppliers; they are true partners and a significant key component of an organisations success and growth. A great 3PL supplier will boost brand reputation to retailers and to the consumer. Alternatively, poor 3PL support can have a meaningful and detrimental effect.
SO…how can a responsible forward thinking organisation ensure that its 3PL support is in synch with its corporate goals?
The Options – who are the main ‘players’? What are their specialities? Who can move the volume we require? And what is their track record like? These are just some of the initial questions you should be asking yourself. Then you can move on to questions like, what is the ‘culture’ of the business? What are their key executives like? Are they forward thinking and offering new solutions to upcoming problems or purely reactive? Can they add real value to your business?
Tracking your progress.
Then there are KPI’s – Key Performance Indicators, the true definition and measure of the required performance by a selected 3PL.
To meet as specifically as possible the overall goals of the supply chain in question, there needs to be definition, establishment, and agreement, implementation, management, and maintenance, of specific KPI’s. For example if your waste / damages were at 5% when you were in charge of distribution you would want your 3PL to reduce that number. Therefore adding profit and value to your business.
A well-defined suite of clear KPI’s well communicated across a business will ensure cost effective timely reliable supply chain performance. Performance within which everyone is on the same page and knows what exactly is required by all involved at every stage in the distribution cycle. All expectations are clear, and all performance can be, measured, indexed, and assessed.
Price is important but value, and indeed values, are the key.
Is the 3PL proposition providing the best VALUE?
Does the 3PL proposition align closely with your VALUES as a business?
With a spectacular pedigree of growth and success over the past twenty years – Culina Group are well placed for consideration for key 3PL contracts across both chilled and ambient sectors – Next time contact us and add real value to your supply chain.