When Charles Dickens penned his classic book Great Expectations, he unknowingly summed up a classic problem plaguing many third-party logistics (3PL) relationships. Many companies now place a lot of confidence in their 3PLs. However, some are a little too confident, expecting not just solutions but miracles. With that in mind, allow me to elaborate on four trouble spots even the best 3PL relationship won�t be able to solve.
Many companies have so many players and departments at cross-purposes with each other that even Madelyn Albright would find it difficult to negotiate a peace agreement. No matter how savvy your 3PL is, it won�t be able to mend factions or solve political unrest within your organization. What it can do is provide an objective point of view about certain logistics challenges, offer fresh perspectives on structuring your logistics process and even point out places where there are greater opportunities for dialogue. But in the long run, your company�s commitment to teamwork and integration must come from within.
Many companies regard 3PLs as a quick way to improve customer relations. They are both right and wrong. We can make rapid improvements in the kinds of service levels that please customers � for example, reducing late or inconsistent shipments or minimizing claims issues. However, we cannot undo the damage caused by severely strained customer relationships overnight, especially if your company has had a long track record of violating customer trust. When your customers see a trend of positive performance through your 3PL, they will be willing to believe your company has truly mended its logistical ways.
Shippers always want to know how 3PL systems can add value to their supply chains � a valid and important question. Much of the answer depends on the 3PL chosen. However one response will be consistent throughout the 3PL industry: we�re not total systems providers. Most 3PL IS strengths begin and end with developing, procuring and integrating supply chain information solutions. As a result, 3PLs are not your best options for resolving enterprise-wide systems issues such as manufacturing control or MRP. Nor should you expect us (3PLs) to develop interfaces between our systems and yours without some input and involvement on your part, because no one knows your systems as well as you do.
There has been a lot written about how 3PLs can help companies improve their profitability and competitive advantages through better supply chain management. However, this does not mean that a 3PL can cure all of a shipper�s competitive deficiencies. A poorly made product delivered to the right place at the right time and in the right condition is still a poorly made product. And a badly marketed product will probably sell slowly (or not at all) even though its handling and delivery may have exceeded retailer expectations. Even the best 3PL � and the most brilliant logistics strategy � cannot salvage a poor overall corporate strategy or a misguided set of competitive assumptions.
By saying these things, I do not mean to imply that 3PLs do not enjoy being problem solvers � or that you shouldn�t raise the bar a bit when you come to us. In fact, I�m of the opinion that shippers should set more aggressive objectives for their 3PLs than they do for themselves. Just make sure these objectives have a firm basis in reality. If they are, your great expectations have a far greater chance of being fulfilled.
Todd Carter is senior vice president of Customer Solutions for GATX Logistics Inc., a provider of contract logistics services. He can be reached at 904-396-2517; fax 904-396-3984; e-mail tbcarter@gatx.com; or via the company�s Web site at www.gatxlogistics.com.
