Executive Briefings

Getting to Win/Win in 3PL Customer Relationships

The goal for 3PLs always is to negotiate a win/win contract with existing and new customers, says Mike Bautch of Universal. He offers insights and examples on how to create win/win relationships that keep improving over the years.

Getting to Win/Win in 3PL Customer Relationships

If both companies negotiating a logistics outsourcing agreement are committed to improving the supply chain, the result will almost certainly be win/win, says Bautch, who is president of Universal Value Added Services, a division of Universal Truckload Services. "That means there will be, on both sides, empowerment, open communications, transparency, financial benefit and continuous improvement."

One pathway to win/win is what Bautch calls an “eight-wall approach.” This is when a logistic provider spends time within the customer’s four walls to learn their business and processes, and brings that knowledge back to its own four walls for execution, making it an eight-wall solution. “Because so much that we do in our work impacts the customer’s production and inventory, a solution can’t be contained only within our four walls,” he says. Bautch notes that one customer improved its inventory accuracy from a percentile in the low 60s to the high 90s using the eight-wall approach.

After a relationship has been in place for several years big savings are not as easy to come by, Bautch says. “One thing we sometimes do is to bring in a new set of eyes,” he says. “We may ask one of our industrial engineers or IT people who hasn’t worked on this business to give us an assessment. We are always setting the bar a little higher and finding new ways to add value. It is a process that never ends.”

To view the video in its entirety, click here

If both companies negotiating a logistics outsourcing agreement are committed to improving the supply chain, the result will almost certainly be win/win, says Bautch, who is president of Universal Value Added Services, a division of Universal Truckload Services. "That means there will be, on both sides, empowerment, open communications, transparency, financial benefit and continuous improvement."

One pathway to win/win is what Bautch calls an “eight-wall approach.” This is when a logistic provider spends time within the customer’s four walls to learn their business and processes, and brings that knowledge back to its own four walls for execution, making it an eight-wall solution. “Because so much that we do in our work impacts the customer’s production and inventory, a solution can’t be contained only within our four walls,” he says. Bautch notes that one customer improved its inventory accuracy from a percentile in the low 60s to the high 90s using the eight-wall approach.

After a relationship has been in place for several years big savings are not as easy to come by, Bautch says. “One thing we sometimes do is to bring in a new set of eyes,” he says. “We may ask one of our industrial engineers or IT people who hasn’t worked on this business to give us an assessment. We are always setting the bar a little higher and finding new ways to add value. It is a process that never ends.”

To view the video in its entirety, click here

Getting to Win/Win in 3PL Customer Relationships