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This week’s guest blog post from our friend Charles “Chuck” Intrieri (whom we HIGHLY recommend connecting with on LinkedIn), comes to us again with his experience as a 3PL consultant by blogging about the importance of a collaborative supply chain between manufacturers, suppliers, and logistics providers for an optimized supply chain.

collaboration-in-the-supply-chainThe Importance of Trust Building

Companies who have managed to build a healthy structure of trust within their organizations are able to create a healthy structure of trust with their 3PL providers. The key to building a healthy structure of trust is the understanding within the client organization that there is a single set of goals and a commitment to support and live the goals. Once this infrastructure of trust has been created, then the client-3PL relationship can start to produce magnified value (Continuous Improvement, LEAN initiatives, and Cost Reduction,) and prove to be true win-win relationship. Adversarial relationships with the 3PL will not work long-term.

In order to build trust in your relationship with a 3PL it is crucial to select the right 3PL partner that can meet your particular requirements and with whom you can strengthen your relationships. Thus, the key to a successful logistics outsourcing is a well-organized process of selecting and communicating with the potential 3PL providers.

To be effective, this process can take up to six (6) months, depending on the team effort and Project Plan implementation.

Benefits from a Collaborative Supply Chain

When trust is in place, you can expect seamless collaboration between a 3PL and the customer. Some advantages of optimization realized in the supply chain from collaboration are:

  • Collaboration Increases Share of Wallet: This simply means over time you gain a deeper relationship, thus in the trust of the customer, you gain more of the business.
  • The Longer the Collaboration, the Lower the Costs: Over time, trusted collaboration begets an understanding so intimate, you begin to understand each other  and almos “finish each other’s sentences.” Simply put, you know internal processes and have a work flow that minimizes resources spent on administrative or time intensive tasks.
  • The Power of Word of Mouth: The old saying is true “If you do right by someone (in business), they will do right by you.” Referrals are the life blood of any business, and if trust and collaboration is a part of a business relationship, a supplier, OEM, or the 3PL can refer you to get more business.
  • Innovation through Long-Term Collaboration: This goes back to the second point. The more you understand the pains and the processes of the client the easier it is to lead towards innovative ways which lead to further hard and soft cost savings.

The final result has to be going beyond your customer’s expectations. You should implement a “Voice of the Customer” (VOC) program to insure that your customer is happy with the 3PL’s service via a VOC questionnaire. Someone in your company, be it Sales or Customer Service, has to be responsible for managing this VOC program. Listen to what your Customer has to say and feed this information back to the 3PL in order to continually improve and truly reach the benefits as stated above.