Feedbacks of the Week -
On Barriers to 3PL/CM Collaboration:
I am a consultant in the reverse logistics and after market services arena (specifically the high-tech industry) and am currently working on a project developing a large and most complex (of its kind worldwide) reverse logistics hub for one of the world’s largest mobile phone manufacturers. In this project, the client owns the processes and the IP. However, a major global 3PL/LSP runs the show at the hub and takes ownership for infrastructure, WMS sourcing, staff recruitment/training, process/IT implementation, customer call handling services, etc.
I have a slightly different perspective on the idea of collaboration between clients and 3PLs/LSPs. One of the real barriers to collaboration, I believe, is the lack of consistent and in-depth knowledge of the internal operations and procedures, both at the client side and the LSP side. This is a result of short-lived careers within companies due to the booming economy and demand for professionals in the logistics sphere. Professionals jump jobs within less than two years, on average, as a result of better pay or higher roles. Perhaps this has to do with the fact that the market in India (with respect to job opportunities) is very dynamic. This could also be applicable to other developing markets. As a result, when contributing know-how and opinion to a collaborative/outsourced project, there might be a significant amount of oversight, missing of important points/requirements while defining scope/parameters/processes and contractual limits; all this because an existing pool of knowledge is lost to the company or someone new and inexperienced has joined in between such a collaborative project.
I wouldn’t be able to comment on the North American or European markets, but Gene Tyndall’s opinion makes sense.
It is true that a 3PL will be reluctant to suggest improvement ideas that cuts deep into their billing volumes. Hence, it is all the more important that while contract manufacturing or 3P engagement takes place, the concerned employer of 3PL should at no stage lose knowledge and full understanding of the processes. You do come across situations where a 3PL has not shared a vital cost reduction idea, but what about your own intelligence? It cannot be a "sub-contract and forget" attitude.
Another aspect to think about is: What makes a 3PL not share vital cost saving ideas? Mainly, it is the fear of lower billing. The way to address this perhaps is embedded in the Toyota example quoted by you, that of being in there for the long haul with the customer. Even as portions of outsourcing businesses are lost, there are more opportunities available to the restricted number of 3PLs who are in with the Company for the "long haul," thereby compensating the loss of billing if any (by implementation of cost reduction ideas), by new business opportunities. Reasons for outsourcing initiatives today are much more than simple cost reduction: in fact, cost reduction may be a minor factor in relation to the aspects of freeing resources towards core activities of the company. And with this trend, there will always be incremental outsourcing that can offset or even exceed the billing volumes lost by implementation of cost reduction ideas from within the processes entrusted to Contract Manufacturing or 3PL.
T A KRISHNAN
General Manager-Corporate Supply Chain Management
LARSEN & TOUBRO Limited
Like any relationship, it's all in the communications. You either have it, don’t have it, or are working to make it better. That's why we have SCDigest as well.
On Wood versus Synthetic Pallets
The debate of the synthetic versus wood pallets in New Zealand for many companies is centered around the extra time and cost in paperwork/compliance requirements.
The mandatory use of fumigated wood and packing declarations to certain markets is a major exporting issue.
The environmental and human impact regarding treating wood and it's disposal must have some final chemical waste factor - Table 1 shows none?
Synthetic pallets for exporting companies seem a good option at this stage. Possibly the use of recycled cardboard/solid paper pallets for some lightweight goods is a possibility. NZ exporters use the "Clean Green" image as a good marketing strategy, especially for organic and primary product - our main export products.
NZ Maritime School
On Building Out Rail Infrastructure
I was a former teacher in a small New England College (retired) and long time student of transportation in America.
My answer to the question is: Americans had better hope it's really true! With the already existing overloading of our highway network and the projection of huge increases in the future, we need massive infrastructure increases in ALL modes of transportation. Increases in rail infrastructure are most welcome, along with the implementation of ever improving technologies for rail that should be brought forward with all due speed.
It would behoove our Federal Government and the individual states to work to ease restraints and apply funds toward this end. Transportation is vital for the survival of this great nation both now and for the foreseeable future. All of our transportation modes are lacking in capacity---especially rail, which is best situated to do the most for the movement of consumer goods---the one mode that for the past 5 decades has been allowed to decay and only in recent years (since the Staggers Act) has finally got a chance to help this wonderful nation we live in towards a survivable future. One may yet have hope as the Rail Roads lead the way once more to a good future for us all.
Donald L. Pass