November 2007 | Sponsored | H.O.W.

How to Find The Right Outsourcing Solution

More to the Story:

PICKING YOUR PARTNER

As the rules of engagement for operating in a global world continue to shift and expand, businesses increasingly find that the myriad pressures of running a core business do not lend themselves to doing all things well. In the interest of doing what they do best and providing customers with the service level they demand, outsourcing has become both a change agent and a competitive differentiator for many companies.

Still, the complexity of global outsourcing and the multitude of logistics solutions providers courting your business can make the process of finding a partner capable of engaging supply chain stakeholders and customers as an extension of your enterprise a daunting task.

Finding the appropriate logistics solution and service provider requires a collaborative and thorough search that matches your current and future growth agendas with a partner that is attuned to your needs.

PICKING YOUR PARTNER

DETERMINE THE VALIDITY OF OUTSOURCING YOUR LOGISTICS NEEDS based on your current systems and business model. Identify the type of function you want to outsource by defining your need—whether it is transportation, freight bill payment, customs clearance, or all of the above—then drill down the specifics for each function. So if you are outsourcing transportation, what modes and services will that include? Make sure you know who your 3PL candidates are and whether they have the capabilities to meet your needs.

DECIDE ON A LIST OF MANDATORY COMPONENTS an outsourcing solution must provide. If your intention for outsourcing is to leverage a third-party's technological capabilities, make sure you understand your IT needs and whether the solution provider has the flexibility to grow with your business. Also consider visiting the service provider's facility to see people using the solution on their turf. Define your requirements: do you want a 3PL to provide on-site personnel? Will it integrate its technology with yours? If not, how much access will you have to its technology? Creating a checklist of your solution needs will enable you to cut through the list of outsourcing providers quickly, without wasting time on vendors who cannot provide exactly what you need.

CREATE A LIST OF FOUR TO FIVE OUTSOURCING SOLUTIONS as potential vendors. Following the first two steps, outsourcers should be able to pare down to four or five favorable candidates pretty easily. Don't always think bigger is better. If technology is involved make sure you see a Web demonstration and, where possible, talk to existing customers and ask for references.

Once you have narrowed your list down to two or three companies, once again compare potential vendors. Keep in mind pricing models and estimated roll out/implementation schedule. At this stage in the process make sure that you aren't just speaking with salespeople, but also interacting and asking questions of the operational people who will be tasked with managing your outsourcing functions.

DETERMINE THE RIGHT PARTNER and help implementation run smoothly. Choosing the right solution is one thing, making sure the implementation occurs without undue problems is another. A 3PL will often be selling to a CEO or CFO, but once the executive signs off on the agreement, the onus is then placed on logistics personnel to follow through and facilitate the arrangement. Without proper communication, the corporate culture may feel threatened by the presence of a third-party provider and resist change. Make sure a proper transition process is put in place and that C-level management, operations, and the outsourced logistics provider discuss the roll out, its value, and how the integration will unfold. This way you can ensure there are no surprises and everyone understands what is happening and why.