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RE: Third Party Logistics (3PL)
Bingo! Finally someone has identified what the real challenge is -
analyzing, understanding, documenting the current process and then detailing
what the new process should look like, what it should do (the results) and
the information required for tie process to execute to the desired result.
And of course, then deciding how the information will flow through the
process, whether using traditional EDI or an XML-based web services, or even
access to shared databases across the entire value and supply chain....as
defined by McCarthy and Porter in the REA model:
.Value chain is a purposeful string of business processes within a company
(primarily transformations)
.Supply chain is a purposeful string of business processes between companies
(alternating transformations (convert) and transfers (exchange))
It is essential during the analysis and design effort to thoroughly answer
the questions of What, When, Who and Why and document them sufficiently to
design the entire new process, including how the information will flow
through it. It never was and never will be solely an EDI issue - EDI,
whether edi or XML or something else - will only be the enabler of the
process execution.
Happy New Year All!
Rachel
Rachel Foerster
Rachel Foerster & Associates, Ltd.
Voice: 847-872-8070
email: <mailto:
-----Original Message-----
From: Jim Greeney [mailto:
Sent: Tuesday, December 30, 2003 7:42 PM
To: David Frenkel; 'EDI-L Mailing List'
Subject: RE: [EDI-L] 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
[Non-text portions of this message have been removed]
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