What is Six Sigma Plus ?
Most of us would have heard of the revolutionary quality management methodology and framework, Six Sigma. For quality professionals and people in manufacturing and operations, Six Sigma is a buzzword for effective quality management and rigorous application of defect prevention and reducing wastage in the organizational processes. However, in recent years, there has been movement […]
The Ugly Face of Contract Farming
Contract farming has been hailed by many experts as the perfect economic arrangement between farmers and companies. Corporations like Monsanto, McDonalds, Starbucks and KFC have become champions in the use of contract farming. Companies claim that it is a beautiful arrangement that cuts out non value adding middlemen and therefore increases the prosperity of the […]
Building a Business Process Improvement (BPI) Model
Embracing Business Process Improvement program is the ideal way for Organizations to make that leap to the next level and build competitive edge. Implementing a BPI program gives the Organization several direct and indirect benefits and advantages. It helps the Organization get rid of the redundancies, reduce dependence upon people and eliminate wastage as well […]
Building Decision Support System User Interface
Decision support systems are now widely used in organizations and military across the world, helping decision makers apply analytical, statistical and scientific techniques to decision making. In recent years, there popularity has significantly increased because of their ability to execute, interpret, analyze and suggest. Decision support systems can be used in the areas of economic […]
Business Continuity and Disaster Recovery – Important For Every Business and Organisation
Managing Business operations in current times is a big challenge. Apart from having to keep looking at the bottom lines and market shares, the managements have another major are to be concerned about which is to continually keep assessing the risk to the business from all quarters and build Disaster Recovery plan in place. It […]
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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