December 2005 | Commentary | 3PL Line

Selecting a Logistics Supplier? Think Supple

Tags: 3PL

We all know why companies outsource logistics functions—outsourcing should allow them to save money and focus on their primary goals.

"Should," however, is the operative word. To turn "should" into "does," companies need to partner with a supple supplier.

What is a supple supplier? One that has no set ideas on best practices when providing logistics services.

Many suppliers talk about their ability to provide best practices—systems, processes, and procedures that yield high results. The sad truth, however, is that "best practices" often translates to "one size fits all." That may work for T-shirts, but not for 21st-century logistics.

In this age of mass customization, outsourced logistics services need to be customized as well. Supple suppliers do just that. Here are three reasons to turn to supple suppliers for outsourced logistics and supply chain services.

1. Continuous improvement. Outsourced logistics suppliers need to provide crucial improvements as they deepen their relationship with your company. Initially, suppliers will work to determine what technologies and solutions you need.

After the initial learning curve, suppliers must be able to react to your actual, rather than anticipated, requirements. This takes a certain level of commitment. By continually providing analysis, and recommending refinements based on ongoing information exchange, supple suppliers help companies reduce costs and increase productivity through continuous process improvement.

This process of tweaking and refining logistics systems and processes is critical in order for companies to reap the benefits of outsourcing logistics operations—increased flexibility, controlled costs, and the ability to make smart decisions that produce positive results quickly.

2. Cost reduction. Supple suppliers find ways to increase your bottom line by reducing supply chain costs. Opportunist suppliers, on the other hand, try to fine-tune services to maximize their own profits. This approach robs companies of the very benefits outsourcing offers.

Logistics providers owe their customers the best prices and highest productivity possible on a continuous basis. A supple supplier makes the necessary investments to determine how best to refine logistics processes and systems to generate positive results.

Opportunists think they can provide a service, then forget about you—except when it's time to send invoices. Supple suppliers don't forget about your needs.

3. Increased productivity. Outsourced logistics suppliers can help companies continually raise the bar by stimulating internal employees. After all, internal employees and outsourced logistics suppliers have the same objective—finding better and more cost-efficient ways to handle logistics operations.

This may be a competitive situation, but it is a positive one. Instead of guessing about productivity targets and how to improve them, for example, companies working with a supple supplier get a stream of productivity enhancement suggestions and cost-cutting proposals.

The ideas behind supple suppliers are the same as those behind Six Sigma and lean manufacturing—improving processes while cutting costs. If your logistics suppliers don't offer these benefits, they are probably more focused on their bottom line than yours.