GOODLES

Gawain Visagie

Customer Confidence Champion

Good 3 PL’s offer, and are expected to have:

Operation Efficiency 

It’ a common consensus that an operation needs to be efficient, have great fundamentals in place, have start-of-theart equipment and new Material Handling Equipment.

Have a great layout and processes in place, aligned to the layout for efficiencies and reduced costs.

Systems / IT Infrastructure 

Customers want reports, proof and data that helps them make decisions, understand line by line costs, and dashboards overviewing buying patterns, market trends, geo-coding, volumes, as well as data by customer and data by region allowing customers to make better or more informed strategic decisions.

Location/s, Network and size. 

Strategic Location or locations allowing for growth and scalability.

A larger network, more facilities and locations, and strategic locations allow for a customer to enter new markets, but gain efficiencies or reduce costs through better locations, and reduced warehousing or transport costs. A larger size allows the 3PL to flex people and use “Good” resources in locations battling or not performing.

Customer Relationship Management and Key Account Management

The expectations from customers, is to have a point of contact that allows the customer to ask questions, and to retrieve important information on challenges, costs, issues or service failures. A good KAM team also manages and pulls together data to present at Quarterly Business Reviews (QBRs), allowing the customer to get insights and information and pivot or strategize for continued future growth. During these QBRs, the KAMs can present all data, key performance indicators, Continuous Improvement proposals, cost reductions or savings opportunities.

The Question is, does having all the above make for a Good 3PL or a Great 3PL?  

A Great 3PL has a few more qualities that differentiate themselves in the market:

Exceptional Leadership

Leadership team that understands the business, inspects and maintains the operational efficiencies, stays close to the operation details, and everchanging market requirements. Leadership needs to stay close to the business, and ensure the inspection and enforcement of all the points mentioned above. Too often an operation runs well, the leadership removes themselves from the operation and very quickly the operation starts to decline. Quickly all the metrics fall and collapse in alignment of this withdrawal.

"Having several locations, good processes, a good network and processes in place, is just the norm and a standard of even doing business in this space."

When a customer loses faith in the leadership team, the customer is more likely to change 3PLs, in essence they all do the same items above, the leadership team gives the customer confidence in how well the above points are maintained.

Key Account Management (KAM)

It’s one thing to have a KAM team. An effective KAM team is not just a conduit between operations and the customer. A good KAM understand the operation, preferably comes from the operations team, and can respond timeously or attain the answers fast. Time is money and delayed responses cost the customer or just frustrate them. An elevated KAM that understands the customer, provides a more integrated partnership and there is less likelihood the customer changes 3PL partners.

Systems / IT Infrastructure

I have dealt with many 3PLs. They spend millions of Dollars, on designing and having a world class system. This adds no value if the fundamentals are collapsing. 3PLs will drive their customer to look for the data or provide reports, the customers require in their system. For clarity, the 3PL wants the customer to dig in a system to find what they need. Isn’t the system supposed to work for the customer. This is where a World Class KAM makes a difference and can draw that data fast or guide the customer as to where the data is located. 

The 3PL knows and owns this system, but expects the customer to be the expert in the system. Classic example of not putting yourself into your customer’s shoes, as you design something to enhance your own business.

In summary, having key leadership, involved in the business, designing a world class system that enhances the customer is crucial, but the KAM should know or be able to support and pull relevant data enhancing their experience and preventing frustrations. Leadership that maintains a world class facility, staying involved and understanding their customer’s needs, staying ahead of the game, gives the customer confidence that leadership is “all over” every aspect of the business. Having several locations, good processes, a good network and processes in place, is just the norm and a standard of even doing business in this space. 

Lastly, most importantly when the customer has an issue, the 3PL, defines the issue, analyzes the root cause and eliminates the issue. Failing this, the customer can remedy the issue themselves, posing the question – Have they partnered with the right 3PL?

As a Senior Supply Chain Leader who has been a 3PL for over 15 years and then been on the customer side for the last few years, managing over 30 plus sites with multiple 3PLs, I hope that gives you the insight, into what I see as a Good 3PL versus a Great 3PL.