This is a guest blog post from Adrian Chen, an Advisory Board Member (APAC) on the The International Supply Chain Education Alliance, originating from a LinkedIn Discussion regarding the difference between 3rd party logistics companies vs 4PLs.
Now & then, all of us require a “higher approach” to effectively source vendors or suppliers, pre-qualify & moving forward to test-trial samples and/or services, negotiate T&Cs; and then the grand finale – implement, execute, manage, and monitor the laid-down processes, KPIs & KRAs. That’s a lot of “considerations and confusions” in-between until the vendor’s finally on-boarded in the system. Typically more so when we need to source & select external 3rd party logistics vendors, & then dissect the levels of service or capability presented.
I do hit a brick wall with a resounding “smack!” very often…not because I don’t know what to do, but because “I don’t know if I’d started off on a journey to arrive at the intended destination”. Until this very day, when such circumstance occurs, I go back to the “starting line or the basics” & lean heavily on the 5Cs principle as my presiding guide to ensure I have mapped my internal commitments thoroughly beforehand. Now, before I dive straight into the “deep-end” of the pool and submerge myself in the technicalities & heightened negotiations to engage any 3rd party logistics vendors, I ask myself the simplest of all questions => is what I’m about to procure for the organization fall within the accepted guidelines of the 5Cs?
The 5Cs Principle provides that confidence when I’m comfortably fitting the puzzle in the massive & intricate labyrinth of how, who, when, where, and why I should source & to engage an exponentially capable 3rd party logistics vendors for my organization’s supply chain. I know the exceptional benefits that such external services provision would effectively contribute, heighten & highlight the value-streams I’d mapped internally.
Nothing means more than driving a smooth through-put, beginning from the front-end up until the back-end of the supply chain itself. But when added components from external 3rd party logistics vendors are in consideration, I need to ask myself again & again (a few more times, perhaps) as to the sub-areas within the back-end of the chain that would be broken out and required to be managed externally. I want to retain that “invisible driver’s seat control” effect. I can’t imagine having my perfectly manufactured SKU getting lost somewhere in-transit, and/or having to stay till the wee hours of the morning to lead & conduct warehouse-to-warehouse, gateway-to-gateway, and/or DC-to-DC searches. We do need adequate controls, almost flawless services provision, undeniable quality-driven processes & systems; & with no argument from the floor – concrete assurances in meeting 100% performance expectations, as per the agreed SoWs in the contracted SLAs.
But…before I make THAT final step, I fall back on the 5Cs as my “decision-making security blanket” not only when sourcing 3rd party logistics vendors, but in several decision making scenarios. Hopefully, the fog would clear & the mist blows over, for me to see thru the external services provided by the valued 3rd party logistics “partners” (not vendors any longer) bring value-add in my “almost” seamless and “almost” perfect supply chain ultimately.
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