January 2011 | Sponsored | Knowledge Base

Achieving Competitive Advantage: How the Right 3PL Partner Can Help You Dominate Your Market

Tags: 3PL, Supply Chain Management

Chris Baltz, Chief Strategy Officer, Transportation Insight
828-485-5000

In today’s marketplace, all too often there is a disconnect between 3PL performance and clients’ expectations. As established 3PL companies mature and less robust players continue to enter the market, the gap between client expectations and 3PL deliverables continues to grow. Most 3PL value propositions focus primarily or exclusively on a client’s financial performance. Profit is the end result of a well-run company. But a company’s true objective is usually a much broader cause, often centered on meeting a market need by delivering a valued product or service to customers with excellence. Can a 3PL really aspire to this lofty goal: not only saving money for its clients, but helping to establish practices and processes that support long-term business value creation?

The answer is yes, and the change in mindset should begin with the client implementation. Unfortunately, client start-ups for most 3PLs look more like projects than processes. Therein lies the first significant gap in expectations. The implementation focus is chiefly designed to improve financial results (objective: capture the identified savings, and do it fast), but generally fails to put in place strategies to better the overall performance of the client’s supply chain. Shifting to this more comprehensive understanding of enterprise value is not instinctive to many 3PLs, but it is an essential change in approach.

The second expectations gap frequently arrives after the start-up phase, once the 3PL has landed its initial commitments. The 3PL may provide some settlement processes and basic reporting, but then typically moves on to the next new client opportunity. The client is left unfulfilled in regard to the promised “logistics support.” So, what’s the key to eliminating the 3PL expectations gap? ...Tangible, measurable, continuous improvement.

At Transportation Insight, we believe each client needs and deserves a comprehensive strategy that achieves and sustains value by providing continuous improvement across the complete supply chain, and perhaps even other key areas of their organization. Put simply, our mission is to help companies across North America move from good to great, then from great to dominant. We expect our services to position clients with a true competitive advantage in their marketplace. We tilt the playing field to the advantage of our clients. In doing so, long-term value creation across the client’s products or services flows naturally and profits soar.

The road to value creation should always begin with a detailed assessment of a client’s existing supply chain, with emphasis on understanding key departmental success drivers and metrics (mapping the “current state”). Through this approach, we gain a full understanding of a client’s current state and how they define supply chain success. It also enables the creation of a customized future state— a “Value Roadmap” which illuminates areas of opportunity and allows the client to fully understand the potential for improvement. With this described approach, a good portion of the disconnect between client and 3PL expectations is eliminated, and the initial implementation becomes the beginning of a value creation process rather than a cost-reduction project.

The Value Roadmap launches a continuous improvement approach that is essential in today’s competitive global marketplace, where change is accelerating and complacent companies lose the race. On-going “logistics support” from your 3PL should come in the form of frequent, structured reviews of current supply chain practices and goals. These reviews should identify continuous improvement opportunities and the means for implementation.

Our approach to client partnership is not only about planning and strategy— it’s also about execution. We believe total outsourcing of supply chain execution yields less than optimum results; so we offer a Co-Managed approach. By combining the existing knowledge and skills of the client’s team with the strategic consultative expertise of the Transportation Insight team, true synergy is generated (1 plus 1 can equal 3, 5 or 10). With a Co-Managed solution, clients receive the benefit of our knowledge, best-in-class practices and industry-leading technology, while maintaining final control over all supply chain decisions.

To fully close any remaining expectations gap, 3PLs should provide clients with an optimal view into not only the client’s supply chain, but also other areas of their business. At Transportation Insight, we provide unique and actionable business insight to our clients, including information that the client cannot efficiently obtain from within their own organizations. After deployment of our logistics solution, our engineers provide clients with an on-going, proactive analysis of their existing and emerging supply chain needs, with continual benchmarking and measurement of all KPI’s.

When the expectations gap has been eliminated, a full-service logistics provider can venture into the prized realm of exceeding clients’ expectations. For our company, that means being a truly different kind of 3PL by offering strategies well beyond the traditional supply chain. Our clients embrace our value-added offerings, including services such as LEAN consulting, Organizational Development and Supply Chain Sourcing. If you would like more information about how Transportation Insight can move your company from good to great to dominant, please contact us at 828-485-5000 or www.transportationinsight.com.