Getting the Full Value Add from 3PL Services by Avoiding Commoditization or Transactionalism
If you are a logistics manager seeking options for a partnership with a 3PL services provider or looking to optimize the 3PL solution, then understanding the expansion of the holistic approach that some 3PLs offer will help you select an option that best...
You will want to gain insight into what differentiates one 3PL from another, what core capabilities they offer and what skills do they have in developing strategies and thought leadership. In short, will they propel your business forward by providing advanced capabilities beyond a piecemeal approach to logistics services?
Since its inception, the 3PL industry has offered its services as single commodities or transactions rather than developing a holistic methodology that optimizes its services through aggregated capabilities such as freight rate negotiation and economies of scale. However, supply chains are increasingly complex, and each organization has varying needs. Thus, selecting a 3PL that has an innovative, holistic approach to supply chain management will enhance your strategic goals and promote the core value of your company through continuous improvements, deep understanding of your business and the ability to add value to the 3PL services.
A 3PL Services Partnership Drives Value
This can be especially critical for shipping LTL, which requires capabilities to optimize the shipping process for multiple clients along the same chain. Cerasis provides the skills necessary to evaluate the present transportation supply chain, identify any inefficiencies, and suggest a program that will reduce costs and mitigate potential disruptions. Moreover, Cerasis works in partnership with its clients and makes logistics management a continuing process of improvement. Within this partnership, Cerasis provides a holistic view of the transportation supply chain, thereby initiating a gating process for creating a higher level of value.
Detailed preparation and planning are critical to the gating process, and a capable 3PL services partner will use a structured, change management method that recognizes and eliminates activities that obstruct the optimization of the supply chain in order to improve product flow and velocity. This requires multiple elements; however, the most crucial element is a well-established communication structure to make sure that projects are initiated, staffed, implemented and reviewed appropriately. The holistic 3PL proactively advises its clients on process improvements, both for short- and long-term focus areas. From this vantage, a strategic 3PL partnership will form a collaboration with your company to fine tune a strategy to meet your needs.
Optimizing the 3PL Services Partnership Continuum
In many ways, innovation within the logistics service provider industry can be viewed along a continuum, moving from the commoditized pallet-in/pallet-out transaction to the holistic partnership that helps a client design a lean supply chain. This progressive continuum evolves from tactical to strategic with a macro overview of the entire enterprise, and such an overview propels organizations from looking at logistics partnerships as based only on revenue instead of providing opportunities to exploit as well.
Thus, when seeking out 3PL services, pertinent questions will surface. What is the primary goal? What data does your firm possess that can be utilized towards designing a solution? What value is the organization seeking? How will that value be measured? What are the best transportation buying solutions? Our 3PL checklist to determine your needs beforehand will help. A holistic transportation management 3PL such as Cerasis will take the lead in identifying and uncovering the answers and then provide a comprehensive analysis. Conventional logistics service providers stuck in the commoditized, transactional approach will simply let you select piecemeal services without regard to the impact on your company’s bottom line.
This holistic logistics approach will seek to identify what resources will be needed to implement projects and work to determine the allocation of those resources. For instance, will the client and the 3PL share resource allocation or will one partner assume more responsibility than the other? These critical questions need resolution prior to implementation of a project, and Cerasis makes forward planning an integral element in its 3PL services. This results in a proactive strategy rather than a reactive response to disruptions and risks, thereby adding value by enabling companies to gain tighter controls over their daily activities. In addition, it ensures positive, forward momentum and quicker time-to-value reached through the partnership.
Sustainable 3PL Services Starts with the “Metrics that Matter”
Another crucial element of the holistic 3PL partnership is the establishment of value and success measurements with concrete documentation of the “metrics that matter.” This ensures that both partners comprehend the value proposition and have efficient ways to measure performance and monitor success. These controls keep both sides aligned, allowing them to build on successes and reduce the time-to-value delivered. Cerasis provides your company with the skills to establish this element of change management and makes it possible to replicate those successes.
Cerasis provides a comprehensive suite of transportation management services to give your company the competitive advantage by getting your products to their final destination in the most reliable and cost effective way. Increasingly, the holistic 3PLs that offer services such as freight rate negotiation, freight auditing, information technology and economies of scale, as provided by the Cerasis transportation management system, the Cerasis Rater, are becoming the strategic partners for success along the supply chain.
Source: Cerasis Blog