A Global Provider
By Splatty • Jul 9th, 2008 • Category: Misc Logistics, Supply Chain Management
I am currently knee deep in a global RFQ for a company with logistics requirements out of and into virtually every major region of the world. After delving into competitor data for the RFQ, I discovered that the company is currently using a variety of different 3PL providers with some of the regions using what I would call local or regional niche providers. Looking at the current scenario and analyzing my company’s opportunities to provide value added services, I began thinking just how important is it for a global company to align itself with a truly global 3PL provider?
I am not sure that I have a complete answer and I’m sure that the strategy is highly dependent upon a company’s supply chain goals; however, here are a few benefits of working with a global supply chain provider.
1. I.T. systems - single source platform for global shipment activity including the ability to run global visibility reports.
2. Account management - Ability to align a company’s account management resources to provide a single point of contact to pro-actively manage a customer’s shipments across multiple points of origins and destinations.
3. Global Network - shipments from point A to B are handled and managed by the same company.
4. Multiple service offerings - typically large global providers have service offerings that span the entire supply chain. This decreases the need for a shipper to piece meal services from multiple providers.
I would be interested in hearing your thoughts about the benefits or negatives of using a global 3PL provider.
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Hey there partner in crime! Your list of benefits of going with a global supply chain provider are spot on.
While I would recommend using a large global supply chain provider if you have a large and/or complex supply chain, I still would recommend against using a single-source provider - too much risk and downside. You would be better off using more than one and splitting them up based on their unique strengths or geographic ability. Even then, I have found it useful to employ the occasional niche provider for certain origins or services. While large global supply chain providers can offer virtually any service under the sun, that doesn’t necessarily mean they perform all those services well. Often a small niche provider can perform the same service far more better simply because that’s their main focus and specialty.
In my current position on the customer side we use several large global players split up around the world, but for one country where we had experienced much difficulty in the past we now employ a niche provider who specializes in services to the U.S. from that country. They may be small on a global scale but they are well known in their home country for their excellent service and volume of business with the U.S.
In my previous career on the service provider side (working for a very small company) one of our customers was a multi-billion dollar company who used several very large providers for their supply chain. However, none of them could handle their over-sized cargo very well and because the company I worked for at the time specialized in this we handled all their over-size business.
I think the important thing for large service providers to recognize is that despite their size and vast array of service offerings they should be honest and realistic in realizing that they can not - and should not - be all things to all people. As a customer now I really appreciate the providers who, organization-wise, could probably handle all of my business but know where their weaknesses lie.
The only other thing I might mention is that I.T. systems, while very important for global shippers, are slowly becoming less so as the development of neutral third-party supply chain software systems - such as GT Nexus - continue to gain popularity with customers who want to use multiple providers but like the simplicity of a single system that isn’t tied to any single logistics provider.