Executive Briefings

Customers Demand that 3PLs Drive Innovation

Some companies have cut their in-house transportation departments by 30 percent or more due to the difficult economy we're in, says David Caines, president of Kenco Logistic Services. That's why they depend on their 3PLs to determine what's needed to help them achieve many of their strategic objectives.

Resources are strapped and limited at many enterprises, yet the supply chain manager or department is still tasked with doing more. What to do?

Caines says there will always be a role, and an important one, for the supply chain manager, but often he or she needs to bring in a provider to help analyze deficiencies or gaps. That outside entity must understand the current state of the supply chain and perform value-stream mapping in order to uncover opportunities that will lead to the desired state.

Ideally, the provider will take a structured approach that will discover gaps right away and recommend solutions that are quickly implementable. "You can't take nine months or 12 months to bring  things to fruition," Caines says.

He likens the provider's analysis to a multi-drawer toolbox. Network strategy analysis is in the first drawer. Where are the opportunities to bring the client's capabilities into better alignment with its customer's value proposition? In the second drawer is transportation design. What's best for the client - dedicated contract carriage, mode optimization, intermodal, or something else?

Inventory is the third level of the toolbox Caines describes. "You want minimal investment with strong customer service levels. Does that call for VMI, postponement, a zero-stock strategy, what?"

Finally, management of the distribution center is the fourth drawer. That calls for analyzing the physical design of a DC and the labor situation, among other things.

To view video in its entirety, click here

Some companies have cut their in-house transportation departments by 30 percent or more due to the difficult economy we're in, says David Caines, president of Kenco Logistic Services. That's why they depend on their 3PLs to determine what's needed to help them achieve many of their strategic objectives.

Resources are strapped and limited at many enterprises, yet the supply chain manager or department is still tasked with doing more. What to do?

Caines says there will always be a role, and an important one, for the supply chain manager, but often he or she needs to bring in a provider to help analyze deficiencies or gaps. That outside entity must understand the current state of the supply chain and perform value-stream mapping in order to uncover opportunities that will lead to the desired state.

Ideally, the provider will take a structured approach that will discover gaps right away and recommend solutions that are quickly implementable. "You can't take nine months or 12 months to bring  things to fruition," Caines says.

He likens the provider's analysis to a multi-drawer toolbox. Network strategy analysis is in the first drawer. Where are the opportunities to bring the client's capabilities into better alignment with its customer's value proposition? In the second drawer is transportation design. What's best for the client - dedicated contract carriage, mode optimization, intermodal, or something else?

Inventory is the third level of the toolbox Caines describes. "You want minimal investment with strong customer service levels. Does that call for VMI, postponement, a zero-stock strategy, what?"

Finally, management of the distribution center is the fourth drawer. That calls for analyzing the physical design of a DC and the labor situation, among other things.

To view video in its entirety, click here