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RE: Third Party Logistics (3PL)
Dave -
The 3PL companies have been used almost exclusively as regional staging areas.
With it's main purpose being reducing the time from order to delivery. Most 3PL
implementations are driven by a need to reduce this period.
In addition to this, companies have found that a well implemented 3PL solution
can improve performance of the whole manufacturing process by providing good
product movement metrics which in turn create a better foundation for plant
floor scheduling and supply chain management.
To determine if a 3PL solution is right for you/your company you will need to do
an in-depth analysis of how it's done today and what the actual costs are. Of
course these costs include both tangible (money, people, reduced order receipt
to cash application cycle time etc.) and intangible (customer satisfaction,
improved forecasting, etc.)
Once you have a good understanding of your costs you can then analyze the
different 3PL product/service offerings to determine if you can effectively
utilize a third party to improve your customers satisfaction and reduce your
cost of doing business.
Unlike some 3PL's this is not an overnight process. It will take considerable
time to do the analysis and determine the future. Once you have determined that
a 3PL is the way for you to go you can expect the implementation time-line to be
anywhere from 90 days to 12 months depending on complexity and the knowledge
level of all parties involved.
The one thing that I have found to be of the highest value in implementing this
type of logistics solution is to pick a 3PL that has the resources, software and
technology in place to be able to quickly adapt to your business requirements.
I know of no company that has implemented a 3PL solution and had the guts to go
back and determine if it was a cost effective moved. The ROI could be years
instead of months if you choose the wrong players. The accountants can get
rather testy if they figure that out.
I hope this helps point you in the right direction.
Jim Greeney
President/GM
asp4edi.com, inc
Austin, TX/Hudson, WI
David Frenkel < wrote:
Jim,
You described the EDI part of your project but how does the 3PL fit in?
Thanks.
Regards,
David Frenkel
612-237-1966
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