| Outsourcing all or a part of your firm's supply chain to | | | | basis for an enduring relationship. Avoid generalities |
| third party logistics (3PL) providers has now become | | | | and stick to quantifiable standards of performance. |
| the norm across the industry. However, it is | | | | Contracts form the basis of the relationship, but it will |
| important to identify the right provider who can | | | | be futile to refer to it every other day in an attempt |
| meet your particular requirements and maintain an | | | | to enforce it. Rather, create an environment of trust |
| enduring and healthy relationship, after the contract | | | | so that functional efficiencies are optimized. The |
| to engage him/her has been inked. This article | | | | conflict resolution mechanism should also be clearly |
| outlines ways to get the most from your 3PL | | | | included in the contract.o Functional Leeway: Once |
| relationships, so that these are mutually beneficial to | | | | the services of a 3PL provider have been engaged, |
| both the parties to the contract. | | | | he must be allowed full operational freedom. If your |
| Managing Relationships: | | | | research has been good and you have engaged a |
| The relationship with your logistics provider does not | | | | competent agency, it is his responsibility to leverage |
| end with the signing of the contract. In fact, in many | | | | his expertise and provide the services contracted. |
| ways, it is just the beginning. You have an equal | | | | Your role hereafter is to manage the relationship and |
| responsibility to nurture the relationship so that you | | | | not the services being provided. Generally, being |
| get the benefits you had sought at competitive | | | | experts in their field, service providers have the |
| prices.o Top Management Support: Logistics costs | | | | latest technologies suited to their field of operation. It |
| represent a substantial portion of a company's | | | | will be in the interest of the hirer to upgrade their |
| budget. It is therefore important that the relationship | | | | own systems to bring them at par with those of the |
| with the PL provider is part of the firm's strategy | | | | 3PL provider, so that synergies are fully exploited.o |
| and sustains over the long term. This is possible only | | | | Integration: The client will have to ensure that all |
| if there is top management support and commitment | | | | systems involved in the supply chain are fully |
| right from the outset. Such commitment then | | | | integrated. Individual functions like procurement, |
| pervades to the lower echelons. The executive in | | | | manufacturing, finance and sales should be fully |
| charge of this function should be in tune with the | | | | integrated with the 3PL provider. This alone will |
| corporate vision and goals, besides having logistics | | | | ensure that the larger corporate goals are met. |
| experience. Efficient supply chains have a major | | | | Selection of a competent and 'best-of-breed' 3PL |
| bearing on corporate performance and can lead to | | | | provider is in important decision. The outsourcing |
| improved service levels.o Contracts: 3PL providers | | | | decision is strategic in nature and must have the |
| have a proclivity to over-emphasize their abilities and | | | | commitment of top management. A lot of |
| promise more than they can deliver. A precise | | | | responsibility weighs on the client to ensure that the |
| contract, with expectations, responsibilities and | | | | relationship is well managed and delivers maximum |
| performance parameters clearly defined, will form the | | | | value. |