Car as a Service (CaaS)
The rapid advancements in technology have changed the fundamentals of many industries. The increase in connectivity, as well as digitalization, is also affecting the automobile industry. Just like other industries, car customers also want to be spoiled for choice. This is the reason that the industry is being forced to rethink its traditional business models. […]
Is a Pollution Tax Worth it ?
Washington DC has seen several proposals for strange regulations. The latest one of these suggestions is a pollution tax. Many people believe that levying a tax may be the solution to eradicating the problem of climate change gradually. The world in general and Washington DC, in particular, wants to get rid of high levels of […]
ERP – General Ledger and Accounting Management
Financial accounting module of an ERP package provides company wide control and integration of financial information. This module provides the ability to centrally track financial accounting data within a framework of multiple companies, languages and currencies. The General Ledger (GL) module is the heart of finance package of an ERP system. Through integration with logistics, […]
The Economic Effects of Digital Distractions
The 21st century is also known as the information age. The biggest companies in the world today sell nothing but information. Consider the case of Google, Facebook, and Twitter, etc. that have billions of dollars in market capitalization. Every company, big or small, now has a social media department. The job of the people in […]
The New NAFTA Deal
Canada and Mexico are the second and third biggest trade allies for the United States. Historically these nations have had a healthy relationship with very few trade disputes. This is the reason why the North American Free Trade Agreement, i.e. the NAFTA was said to be successful. However, President Trump has been extremely critical of […]
Global business models are rapidly changing. Shorter life cycles of products and new business need exert pressure on Supply Chain managers to keep pace with the new scenarios. They are often faced with the target to reduce logistical costs and establish new supply networks.
It has now become a common practice to outsource all logistical activities to third party vendors both in procurement side of logistics as well as finished goods, spare parts and reverse logistics areas too.
Today the 3PL service providers market is filled with players of all sizes and competencies, from single owner driven local service provider to multi national companies. Most of the companies have traditionally been transporters or freight forwarders and over the years have acquired warehousing and contract management capabilities keeping in line with the growing needs.
Selecting a 3PL service provider to provide warehousing services needs careful considerations on the part of the SCM manager responsible for the decision. The right partner selection is important because you are handing over the companies assets to someone else’s custody and secondly any performance hindrance can seriously affect the sales and revenues of the company in case of FG Supply chain or effect the plant production in case of Raw Material supplies.
The business volumes and size of the project will determine the selection of the Service Provider. Most of the Multi National Companies can offer integrated logistics services to manage the entire supply chain including freight, transportation and warehousing; you will also find companies at regional or local levels that offer warehousing as a core competency area.
The size of the company is important as a key parameter as one would not want to deal with a small company that does not have the capability to invest or a fly by night operator. The Management structure of the company holds a clue to their focus on the various businesses and customers. This will enable you to find out the kind of management focus that the service provider has in warehousing or CL as a product.
A multi national company being able to invest into your business does not necessarily make the best choice. They can more often turn out to be expensive. Besides the availability of CL expertise in another location or country does not necessarily ensure competence locally. However Multi nationals are preferred as partners most of the times due to many other advantages like integrated services, global standards, ability to invest, etc.
Responsiveness measures the quality and speed with which the service provider company responds to your bid request and engages with you to offer a solution. The nature of response and interaction hold key to the company’s culture and enables us to evaluate options of investing into a relationship or partnership possibility.
A vendor should be able to demonstrate the competency regarding its experience in managing functions for other customers and products. Besides the competency can be demonstrated and seen in the solution building process or document prepared and presented by the vendor.
A company with experience in managing distribution center operations would have the team comprising of people with sufficient experience in the operations at management level, supervisory and staff levels.
The company needs have to have a strong IT management and functional operational competence and capability in managing the IT system at site as well as being able to support the site with IT administration at management level.
The capability, interest and attitude of the vendor would help you to choose the vendor who is interested in your business with long term prospect and is willing to invest time, money and effort and not somebody who is chasing business as a sales target and doesn’t have the required interest, organizational and operational capability to service your business.
Lastly the cost drivers play a major role in vendor selection for the project. An RFQ document should seek information on above criteria from the vendor, and the process of selection should be based on evaluation, demonstration coupled with site visits to vendor’s site to assess overall suitability.
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