Supply Chain Blog

FMCG, Brewing & Pharmaceuticals: Try sharing 3PLPs

Posted by Dave Jordan on Mon, Oct 15, 2012

The proposal by the UK and other Commonwealth governments to share diplomatic missions and facilities around the world is perhaps initially surprising but for once in the world of diplomacy, it makes great sense. When most of the activities taking place in these outposts are extremely similar then there are strong cases for cost and efficiency savings. Even if the collaboration is limited to the mainly mundane consular activates which do not reflect policy of an individual state there will be significant synergies. Processes, systems, people, utilities and purchasing are all just a few of the areas where cost would be reduced.

Each country will still have its own policies and position on specific issues and within any combined mission there can and would be differences in approach and expectation. Equally there will be occasions when nationally sensitive issues are dealt with behind closed doors for at the end of the day they are different countries with varying priorities and values.

We have previously looked at the pros and cons of sharing one or more Distributor partners and the apparent reluctance to do so. By the time your product gets into the public domain in distribution there is very little confidentiality available. Confidentiality is always limited in FMCG, Pharma and Brewing as so many people are involved along the process of a new launch, for example. With the arrival of so much instant social media you can hardly keep anything out of the public eye – just ask a certain British princess. Still, few companies take the bold step of using the same Distributors.

If we retreat backwards along the Supply Chain the arguments for sharing 3PLP partners are even greater particularly in countries where quality partners are in short supply, eg CEE. Some companies do specify non-competitive clauses in their contracts but unless there are exceptional circumstances or a previous poor experience I think that is short sighted.

If a 3PLP provider exists who has a proven record of delivery in a certain country and/or sector then why not use that experience? Of course, the decision to share a logistics partner should not be taken lightly and many sensible and simple “Chinese Wall” safeguards need to be in place to prevent fall-out and business risk. Clearly defined procedures should address quality of employees, restriction of sensitive information and perhaps most of all, physical access.

This really can work and leave your resources free to win the sales battle in other areas. A little dose of diplomacy is all that you need.

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Tagss: Brewing & Beverages, Logistics Service Provider, Logistica Management, Dave Jordan, Pharma, Supply Chain, CEE, Logistics Management, Sales, Outsourcing