Outsourcing is being driven by a myriad of forces. A recent industry survey of 381 American
Navigating the World of Outsourcing
Reprinted from LQ™Magazine,Volume 12, Issue 3, July 2006
British chemist John Walker became an inventor by
accident.He was mixing up chemicals for percussion caps -a component of ammunition - when some drops of the mix-ture accidentally fell onto Walker’s workshop floor.Walker’s shoes rubbed on the mixture,and it caught fire.Intrigued,he experimented by treating cardboard sticks with the chemical mixture and rubbing them against a strip of sandpaper.The result was the world’s first friction match.Known at the time as a lucifer,Walker’s invention demonstrated what could hap-pen when a little friction is applied.
For operators and managers of supply chains,a little fric-tion isn’t a good thing.Modern supply chains depend on the harmonious flow of goods,information and funds.Whatever impedes this flow - factors like port congestion customs delays,loss of visibility - creates friction.Such friction can lead to higher costs,more inventory ,longer lead times and dissatisfied customers.
Global and Just-in-Time
Two business mega-trends,globalization and just-in-time ful-fillment,have further complicated the management of free-flowing supply chains.Although some resist it,globalization is accelerating.Some $8.9 trillion in merchandi was traded around the world in 2004.That’s well over double the $3.5 tril-lion in merchandi trade in 1990.Today ,global trade accounts for approximately one quarter of our nation’s gross domestic product (GDP),up from 13 percent in 1970.Supply chains are stretching farther across borders as more compa-nies source and market globally .
Just-in-time (JIT) fulfillment is being adopted with equal fervor.For years,manufacturers found that carrying a large inventory of parts and components was inefficient - and devoured cash,space and resources.In recent years,this lean inventory philosophy has spread from manufacturers at one end of the supply chain to customers like retailers and rv-ice companies at the other end.As downstream customers take charge of their supply chains,the need to deliver the right products to the right customers at the right time - just in time - has intensified.
JIT-driven enhancements in supply chain process have yielded some astonishing business results.In the ten years between 1992 and 2002,American companies reduced their collective inventories by $4.6-trillion.Order-to-cash cycle times improved by 10 percent.
Globalization and JIT fulfillment is transforming global logistics.Shipments are getting smaller and more frequent,meaning that delivery rvices need to be more time-nsitive and time-definite.Shipments are also traveling greater dis-tances and crossing more borders ,
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so planning is more involved,lead times longer and customs compliance more complex.What’s more,there are also more supply-chain par-ties to manage and more handoffs to fines in cross-border transactions.
Even transport modal choice is becoming more complex.Shipping decisions are now made on the basis of time and cost rather than on shipping mode.Air,truck,ship or rail:it doesn’t really matter to the customer,as long as shipments get工作信息怎么写
there quickly ,affordably and predictably .In fact,a study by the Colography group reveals that 40 percent of U.S.business are active shippers in three or more modes of expedited transport.Intermodal logistics adds another layer of com-plexity to an already challenging logistics environment -another layer of friction.
Outsourcing Catches Fire
Any wonder,then,that all the sources of friction in the sup-ply chain have helped ignite demand for third-party logistics (3PL) outsourcing? Clearly ,more and more firms are turning to outside experts to help manage the complexities of their global JIT supply chains.In fact,firms around the world are spending an estimated $270 billion each year on 3PL out-sourcing.And the category is expected to expand by an aver-age of 6.9 percent annually through 2009.A recent industry survey of 381 American shippers by eyefortransport revealed that 69 percent currently outsource their logistics operations to 3PLs.
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Which functions are companies outsourcing,according to the survey? Most popular are the conventional rvices:Forty-six percent outsource transportation,and 34 percent warehousing.But companies are also starting to outsource more value-added and customer-facing rvices like rever logistics (18 percent),customer support (11 percent) and information systems (10 percent).In other words,3PLs can be found from one end of the supply chain to the other,support-ing a range of tactical and strategic functions for their clients.Still,choosing a suitable 3PL partner or group of partners is a mission not to be taken lightly .After all,how well your 3PL partners perform will have a direct impact on your firm’s financial performance - not to mention your customers’level of satisfaction.The decision also has long-term implications.Once you have chon your partners and i
ntegrated them into your supply chain,it can take months and even years to dintangle if things go awry .
Admittedly the evaluation process isn’t easy - there is a bewildering array of logistics providers to consider.Although the 3PL market has en considerable consolidation in recent years,the market is still relatively fractured,with a handful of global providers and thousands of "specialized"players.Even among the largest integrated providers,no sin-gle company has a dominant global market share or heavy prence in every part of the world.
Whether you choo a single integrated 3PL provider to manage your global supply chain or opt to stitch together a number of specialized players,finding the right match for your company and your overall business strategy is probably the most important logistics decision you’ll make.Following is a checklist of factors to consider when you’re choosing your 3PL partners:
3PL Checklist
•Scope of Strategic Services Supply chains are no longer
行进间运球just tactical considerations to be managed by the shipping department.Supply chain management is taking center stage in the executive boardroom,as firms begin to u their supply
IN 1827,Reprinted from LQ ™ Magazine,Volume 12, Issue 3, July 2006
chains not only to cut costs but also to support company strategy .In fact,smart companies u efficient,synchronized supply chains to minimize costs enhance cash flow and financial performance,expand into new markets,differentiate their products and improve customer rvice.
To support the strategic business objectives,your 3PL partner should offer a range of rvices - or at least partner with other logistics specialists who do.Your provider should be able to move up the value chain from conventional rv-ices like transportation and warehousing to sophisticated rvices like rvice parts logistics,rever logistics,IT rvic-es,supplier management and supply chain design.With the ability to address the entire breadth of the supply chain,the 3PL provider can make strategic logistics decisions that won’t benefit one part of the supply chain only to harm another.At UPS,for example,we had a catalog retail customer that was suffering from a high and costly rate of product returns.Buyer’s remor t in as the customers waited for their orders to arrive.By spending more on transportation to get catalog orders delivered faster (within two days),this retailer was able to significantly reduce the rate of returns and save more money overall.孕妇能吃虫草吗
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Intermodal Flexibility Increasingly ,firms don’t care how their shipments get there - just as long as it is quick,pre-dictable and affordable.What’s more,different product lines within a single company might demand different modes of transport,depending on their weight,value,product type,asonality or vulnerability to obsolescence.Your 3PL provider should provide access to a range of transportation modes - rail,truck,ship or plane - to offer the best balance of speed and cost.This doesn’t mean a single 3PL partner has to operate its own multi-modal transportation networks - as long as it has solid partnerships with other transporta-tion companies.
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要素驱动Global Asts and Reach In a recent survey of North American 3PL providers,respondents say that incread pres-sure to internationalize company rvice offerings is the most important dynamic in the marketplace.Your 3PL partner should own or have access to an extensive global network with a prence in Europe and Asia.Transportation networks,warehous,customs brokerage,forward stocking locations and information systems for product tracking,inventory man-agement and low-cost routing:the are the kind of asts you need to source and ll globally .Also,check to e if your 3PL has sufficient capital to reinvest in continued growth and to compete in an increasingly competitive global logistics marketplace.
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Vertical Experti There’s no such thing as a universal sup-ply chain design.Different industries have different demand patterns,different delivery requirements and time frames and different product types.Your 3PL should demonstrate deeper experti and knowledge of your particular industry - and have capabilities in place to rve the specific needs.
For instance ,
the pharmaceutical industry requires detailed record keeping of chain-of- custody as well as licens-es to handle and store certain drugs.Logistics in the food industry can involve shorter time frames for perishables as
央行征信well as refrigerated trucks and facilities.The automotive industry moves large,high-value goods that must be precily delivered and tracked.Consumer electronics like digital cam-eras demand speedy ,cross-border ,
direct-to-store supply chains that prevent product obsolescence and stock-outs.Is your 3PL provider equipped to accommodate the varying vertical-industry demands?
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Supply-chain Visibility The ability to e where an order is at any given point in the supply chain - where it originated and where it’s heading,down to the product stock-keeping-unit (SKU) level - is the key to efficient effective supply chains.Without end-to-end visibility there’s no control.As supply chains cross more borders,incorporate more modes of travel and involve more parties ,maintaining visibility through all the handoffs is a greater challenge.Compliance with increasingly stringent curity measures from customs agencies (customs agents often require transmission of prod-uct-level information before the ships reach port or the air-planes land) places an even higher premium on 3PLs with advanced visibility tools.
Emerging technologies like RFID promi to improve sup-ply chain visibility .But for now ,make sure your 3PL partners offer visibility platforms today that can span parties and modes of transport.The kind of technology ud to deliver visibility isn’t as important as whether the 3PL can deliver the type of information your firm needs.Too much information can be a bad thing if you’re not equipped to capture and manage it.If your firm is a high-volume shipper,look for 3PLs
who information platforms easily integrate with your own
automated systems.
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Disruption Planning No matter how carefully you might
plan your supply chain and hone your process,contingen-cies will ari to disrupt the flow of your supply chain.Chief among the disruptions is the congestion on our transporta-tion networks,both here in the United States and around the world.At our major shipping ports on the East and West Coasts,imports and exports can experience capacity related delays.Road congestion in the sts the economy more than $63 billion each year,and truckers carrying our goods will tell you that it’s getting wor.Rail demand is up and capacity is down,creating bottlenecks.The same is true at our nation’s airports,where air cargo traffic is increasing more than 5 percent every year.Infrastructure congestion isn’t the only problem.There are other disruptions like bad weather,mechanical breakdowns,port strikes - even a shortage of truck drivers.
Make sure your 3PL provider is experienced in disruption planning.Check to e that it has the advanced in transit visi-bility systems - as well as arrangements with multi-modal transportation providers - to accommodate emergency rerouting of shipments.For unusual spikes in demand,your 3
PL partner should also have the extra capacity to accommo-date fluctuations.Flexibility in a world of supply chain fric-tion and unexpected disruptions is invaluable.
Friction is good for making fires - but bad for making your supply chain flow .Choo a 3PL partner that can help your company smooth the path for global sourcing and lling.
Reprinted from LQ ™ Magazine,Volume 12, Issue 3, July 2006
