Using Technology to Maximize Value Chain Partnerships
Q: How can value chain partners cooperate to create and share efficiencies?
A: You just have to use your imagination and dig in. There are so many ways you can help your customers. You just need to ask and listen. Some third-party logistics (3PL) providers get deeply involved to provide technology so they stand out from their competitors and add value to their services. For instance, we have one client who delivers motorcycles for a major manufacturer. When the bikes are loaded into a trailer, someone scans the VID barcode, which triggers the manufacturer’s billing to the dealer. It actually gets even deeper than that. When the bikes are delivered, they are inspected by a 3PL-provided phone app, and damage reports are instantly transmitted to the manufacturer. If you are providing technology like this to your customers, it makes it very hard to lose the business.
Q: Wow. That’s a lot of cooperation. Any other interesting examples?
A: Sure, lots. I have another client that has developed a whole system to automate and manage a major fragrance manufacturer’s inbound shipments. When vendors want to ship, they login to the 3PL provider’s portal and choose which active POs to ship. From there, the information flows to an internal portal where the manufacturer can change destinations, set appointments, change quantities, and even choose which trailer to load it into. After that, the information is sent by API to the 3PL. Once the 3PL assigns a carrier, a bill of lading automatically is sent to the vendor with all the corrections, and the cycle is completed. All of this technology is provided by the 3PL. One of the best parts is that a system like this benefits everyone involved. It’s a win-win-win. It makes it more profitable for the 3PL by reducing manual labor and locks them into the business. It helps the manufacturer by lowering costs and making their supply chain more efficient. It also helps the vendors have more automated, less error-prone relationships with its customer, the manufacturer.
Q: That sounds complicated to set up. How do you get started with something like that?
A: Start small. See if you can help your customer with some custom reporting. Or, just come out and ask your customer where their pain is, and see if you can figure a way to remedy it. Many times, your customer’s IT department is stretched thin and if you can come in with a solution, their best and easiest path is to outsource. If they outsource to you, you can lock your company into your customer’s business for a long time to come. In my experience, many times these relationships last decades.