Executive Briefings

The Future Model: Driving Speed to Value for 3PLs and Customers

Analyst Insight: Implementation time-lines for transportation management outsourcing continue to shrink thanks to cloud-based systems, process standardization, and features like automated carrier contract management. This is not the case for facility start-ups. With 10+ key milestones, hundreds of key tasks and sub-tasks, time-line slippage and cost overruns can quickly extend the time to value for both 3PLs and shippers. – Valerie Bonebrake, Senior Vice President, Tompkins International

The Future Model: Driving Speed to Value for 3PLs and Customers

A significant opportunity for improvement exists for both parties to improve facility start-up performance. This is increasingly important as rising customer demands and expectations require network and (as a result) facility changes to compete.

To make the changes required to drive time to value, new ways of working together must evolve. Consider these key points:

Be willing to invest time in the relationship.  Today’s strategic shipper-3PL relationships span business units, geographies and services, and they represent hundreds of millions of dollars in inventory and fees for services.  The traditional RFQ selection process is too slow and inefficient; causing delays and, even worse, can result in a poor selection.  Today’s best practices suggest working with a short list of pre-qualified strategic partners. Establish peer-to-peer alignment, conduct annual strategy sessions, and use open book accounting and gain sharing. Collaborate for greater innovation, stronger relationships, and better results.

Share information early and often.  The lack of adequate lead time too often means the shipper team is not “in the know” soon enough. Develop a forum for strategic discussion, design and planning for future requirements.

Become industry experts. Do not reserve that only for engineering and operations. Understand the trends and challenges facing your clients. Create and nurture high-performing teams with broad skill sets who are always looking ahead. Select those target industries and accounts where you can bring the most value—not just for each operation, but to benefit your clients in a material way.

Expect and plan constant change. Many of the industries who are big users of 3PL services are undergoing tremendous change. 3PLs need to get ahead of the game and come to the table with solutions.  This can be challenging when capital investments in facilities and equipment are involved.  Focus on strategic relationships, work together and consider all the options. Involve the right partners to provide a level of flexibility that works for both parties. 

Utilize Centers of Excellence. Too often 3PLs are grabbing resources from one operation to start up another. Knowledge management and process expertise are not given the focus they require to design, implement and operate efficiently. Breaking old paradigms and replacing legacy technology will require investment in people and technology. The impact of change cannot be underestimated, but the long-term results, fueled by faster, leaner and more profitable start-ups, will result in higher client satisfaction, better retention and potential for investment sharing. 

                                                          The Outlook

In 2015, expect to see the pace of change accelerate as shippers seek new multi-use facilities for distribution, packaging and fulfillment, and reverse logistics. Leaders will adopt new technologies, sustainable facilities and lean processes.  They will begin the journey by investing in people and relationships to drive new ways of working to achieve shorter time to value.

A significant opportunity for improvement exists for both parties to improve facility start-up performance. This is increasingly important as rising customer demands and expectations require network and (as a result) facility changes to compete.

To make the changes required to drive time to value, new ways of working together must evolve. Consider these key points:

Be willing to invest time in the relationship.  Today’s strategic shipper-3PL relationships span business units, geographies and services, and they represent hundreds of millions of dollars in inventory and fees for services.  The traditional RFQ selection process is too slow and inefficient; causing delays and, even worse, can result in a poor selection.  Today’s best practices suggest working with a short list of pre-qualified strategic partners. Establish peer-to-peer alignment, conduct annual strategy sessions, and use open book accounting and gain sharing. Collaborate for greater innovation, stronger relationships, and better results.

Share information early and often.  The lack of adequate lead time too often means the shipper team is not “in the know” soon enough. Develop a forum for strategic discussion, design and planning for future requirements.

Become industry experts. Do not reserve that only for engineering and operations. Understand the trends and challenges facing your clients. Create and nurture high-performing teams with broad skill sets who are always looking ahead. Select those target industries and accounts where you can bring the most value—not just for each operation, but to benefit your clients in a material way.

Expect and plan constant change. Many of the industries who are big users of 3PL services are undergoing tremendous change. 3PLs need to get ahead of the game and come to the table with solutions.  This can be challenging when capital investments in facilities and equipment are involved.  Focus on strategic relationships, work together and consider all the options. Involve the right partners to provide a level of flexibility that works for both parties. 

Utilize Centers of Excellence. Too often 3PLs are grabbing resources from one operation to start up another. Knowledge management and process expertise are not given the focus they require to design, implement and operate efficiently. Breaking old paradigms and replacing legacy technology will require investment in people and technology. The impact of change cannot be underestimated, but the long-term results, fueled by faster, leaner and more profitable start-ups, will result in higher client satisfaction, better retention and potential for investment sharing. 

                                                          The Outlook

In 2015, expect to see the pace of change accelerate as shippers seek new multi-use facilities for distribution, packaging and fulfillment, and reverse logistics. Leaders will adopt new technologies, sustainable facilities and lean processes.  They will begin the journey by investing in people and relationships to drive new ways of working to achieve shorter time to value.

The Future Model: Driving Speed to Value for 3PLs and Customers