Supply Chain Blog

Supply Chains – Managing internal & external 3/4PLP expectations

Posted by Dave Jordan on Wed, Feb 22, 2017

American sit-coms. With very few exceptions I personally do not find them at all funny. At times the funniest part is hearing the hilarious canned laughter when nothing in the least bit humorous occurs. MASH, Taxi and Cheers are the only sit-coms out of hundreds that managed to connect with my sense of humour. This is a personal thing of course but I do not like Raymond and I never got into Friends or what I consider its males deceased sequel, The Golden Girls.

Maintaining the comedic theme, not everyone likes Donald Trump either. The recently installed POTUS has certainly ruffled some feathers and while I am not going to dwell on the content of what he has done or said, the fact is that he is essentially doing what he said he was going to do. The Donald was voted in on certain promises and he appears to be trying to deliver. That ends my toe dipping into American comedy and politics (is there a difference anyway?) and now to Supply Chain stuff!

SUPPLY_CHAIN_3PLP_4PLP.jpgSo how is the above relevant to Supply Chains across the globe? In preparation to outsource or renew transport and/or warehousing contracts to 3PLPs or 4PLPs, an important part of the process is gathering the views and expectation of the key stakeholders. This will ensure the tender process and tender documentation are designed specifically for the company in question and also in good time.

Even within a small FMCG company board team the motivation for outsourcing will vary widely.This table shows where priority interests may lie across the management team and with customers. There is no guarantee any outsourcing arrangement will achieve one or more of these benefits but each is possible.

 4pl-3pl-expectations-supply-chain.jpg

As you can see, individual functions may have very different expectations from outsourcing the corporate logistics operations. Of course, everyone in the team should be working for the best all round company performance but these are the benefits at the core of their functional expertise and requirements. For example, lower working capital will excite the Finance Director but will be met with a blank stare from S&M colleagues.

A key step at the start of an outsourcing process is to find out what the internal and external stakeholders expect and equally importantly, tell them what they can expect in reality. Managing the various and often competing expectations will be an important task for the outsourcing team to avoid wasteful post project debate and mudslinging. Care though, benefits will not be delivered from day 1 so ensure the current and following annual plans reflect a sensible phasing.

If the project delivers broadly what was agreed after the stakeholder interviews there will be no place for any board room dramas or even alternative facts!

Image courtesy of vectorolie at freedigitalphotos.net

Tagss: FMCG, Logistics Service Provider, Dave Jordan, Humour, 3PLP, 4PL