Transportation Strategy and Tactics: Ever Think About the Way you Approach Selecting a 3PL? Supply Chain Consultant? Or Supply Chain Coach?
by Mike Starling
PART 1: CONTEXT & PERSPECTIVE
When the world was flat, no one could see over the horizon. Today this problem has been solved by invention, information, and knowledge. Things that were once considered impossible have become routine. What challenges has your company encountered that can be attributed to an inability to see over the horizon? To truly succeed, one has to put things into context in order to solve problems and meet challenges.
To paraphrase and old clothing retailer’s TV ad, “An Educated Consumer is Our Most Important Product.” So, how can your approach to buying a suit be compared to choosing a supply-chain consultant? Or a coaching firm? WELL, CONSIDER THIS…
According to organizational management expert Peter Drucker, most managers only think tactically. And as Richard Boland puts it, "The problem with managers today is they do the first damn thing that pops into their heads.” To illustrate this point, let me offer you the following analogy:
If you are like the average consumer, when it comes time to purchase that new suit for some upcoming meaningful event, you are thinking near-term—about how much time and money to invest. There are a number of solutions for you to choose from, but which one is right for you? What are your near-term priorities? Do you have any longer-term thoughts in mind? Are you more concerned with cost, or return on your investment? Do you want a suit that just fits, or one that is tailored to fit your specific situation? Now substitute 3PL or Consultant for suit.
Remember, you have different suits for different occasions. Some are tactical in nature, designed for the action of the moment to achieve a certain near-term goal. Others are more strategic in nature, designed to convey an impression. My point is that not all 3PLs can be all things to all people all the time.
You need to pick the 3PL that will best achieve the desired objective, even if it means that you employ two separate 3PLs simultaneously to achieve two entirely separate transportation objectives. Think about that! Operations can be examined separately from “how to reduce my operating expenses.” The first is ongoing tactical. The second may be more strategic in nature, requiring you to examine the overall transportation network, looking for ways to not only cut current expense, but strategically improve operating cash flow over the longer term.
Next: PART II – Supply Chain 3PL Selection: Three Alternatives, Which Is Right for YOU?
PART II – Supply Chain 3PL Selection: Three Suits to Choose From
The SEARS Suit Approach:
The majority of consumers typically opt for the solution that requires the least amount of “hassle” (i.e.; the least amount of thought related to the purchase). “GIT ‘ER DONE” approach! The retail community understands this of course and gladly provide a wide range of “off the rack” choices (colors/styles/etc) to provide you with a “cookie cutter” suit choice solution. This is what is referred to as the “Sears” suit solution. Viable, requires little thought or imagination. Terribly tactical in nature. Sound like anybody you know? Hmmmm?
The MEN’s WAREHOUSE Approach
Or perhaps you fancy yourself as a more discriminating type, and want to put a little more thought and effort into finding a solution that fulfills your image of being more upscale and/or trendy, you elect to shop at a little more exclusive men’s store. The retail market recognizes you as well, and while there are fewer choices of stores for you to choose from, you are satisfied (before you ever enter the store) that “you are going to like the way you look”. The suit still comes off the rack, but now you have some options (hem, cuff length, waist tuck, etc) that make you feel like you are getting more for your money and now you have a “customized” fit. Perhaps more thought upfront, motivated by personal ego and false expectation, but still a tactical solution, clearly lacking a strategy as in defining the desired outcome in a variety of ways. (Cost? Timing? Expectations? Etc.)
The TAILOR MADE for the Client Approach
Finally there is the “most interesting man in the world” kind of consumer. He has a personal philosophy (i.e.; strategy) about “who he is, who he want’s to be, and how to get there” type approach. He doesn’t buy suits all the time, but when he does he goes to a tailor. Hmm? He clearly understands that a) he does not want an “off the rack solution”, b) even if it is “customized” for him. The suit will serve a strategic purpose a) in his wardrobe and b) for specific tactical occasions. The suit is created for him, cut from cloth to fit his specific measurements, and to his specifications. It is designed and created by a master craftsman who understands his clients needs and through depth of artisan experience, how to full fill the client’s vision to meet his expectations and provide measured return on investment. Think strategy first, then choose the appropriate tactic(s) to achieve the objective.
So, be honest now! In your humble opinion, which suit story fits the 3PL, the supply chain consultant, or the supply chain coach selection process you would most likely have taken? Honest now! Really? WOW!
Next: PART III – How is a Suit Like a 3PL?
PART III: How is a Suit Like a 3PL?
The “Sears” Suit:
Large truckload brokerage house operations are a viable “carrier” solution, but while they may provide great service, the service they provide is designed to service customer “volume.”
Sure they’ve got lots of “services,” and a boatload of carriers they contract with. And they’ve “got their finger on the pulse of the marketplace.” But in reality, what they have for you are a lot of off-the-rack, cookie-cutter solutions. Because they cater to a broad segment of the population, they can’t afford to “customize” (read, “compromise on their sales strategy and margin targets”) and still service all their customers. They provide very responsive service, but at a price. They’ll tell you that a service is “free,” but you and I know that there ain’t no such thing as a free lunch. It gets built into the price somewhere, but you just don’t know where or how—and they ain’t gonna tell you!
They may ply you with a siren song about “customization,” but in reality what you are likely purchasing is an “off the shelf” service that for whatever reason you don’t have in your current operational capability quiver! They are purely tactical in operation, and whatever they do for you now, you’ll probably have to revisit twelve months from now. That’s how they make their money, by keeping you needy and on the tactical merry-go-round! Want to know their strategic objective? How much they can mark up the rate they charge you for how little they can get away with paying the carrier they select to move your load! YEP! One is born every day!
Next: PART IV: How is a Suit Like a Supply Chain Consultant?
PART IV: How is a Suit Like a Supply Chain Consultant?
The MENS WAREHOUSE Suit:
YO! JOHNNY DOLLAR HERE...THAT MIKE STARLING IS FAR TOO NICE ABOUT THIS SUBJECT...SO I AM "GUEST HOSTING THIS POSTING"...LET ME BRING THIS DOWN TO THE WORKING MAN's LEVEL SO YOU MIGHT BE ABLE TO UNDERSTAND IT. OK, MAC?
So, ego man, the old fart really stroked you when he croaked “you’re gonna love the way you look. I guarantee it” Right? You let that grey bearded old codger do your thinking for you. Right? So who fits the upscale / trendy “off the rack” but “adjusted to your specifications” tactical approach to supply chain helper? This will be your more sophisticated consultant or 3PL - who is in fact more interested in being “more discriminating” about who they do business with to insure their revenue stream. These are your take the money and run and never look back kind of guys. Great name or reputation but are only interested in dropping a solution recommendation on you (“you’re gonna love it…”)and taking your money and leaving you to go to the dance by yourself!(“…guarantee it”). YEAH, you look great slick, but your consultant was a “one trick pony” who kissed your “tactical” ass, made you feel good about looking at yourself in the proverbial mirror. Now you little narcissist, 6 months later your realize your hand picked buddy may have provided you with a solution to one or some of you immediate pain, but you have no idea how implementation of this fix will impact your financial performance – much less if it fits with the overall company strategic objectives. It is the “I spend therefore I feel good and expect to garner your respect and affection based on the thrills and abilities my boy lolly-pop the schmoozing consultant recommends to apply to you most aggregious pain point(s); WHICH in applying the sponge bob tactical band aid to your dysfunctional operational exercise may stop the hemmoraging; BUT, fails to address the underlying root cause of why you have terminal tunnel vision ” syndrome. Can you picture it? Strike a pose hossie man! You it!
SO, I ASK THE RHETORICAL QUESTION SCHMUCK: Is there any hope for you, REALLY? OK, perhaps? Stay tuned for the next installment and find out. MAYBE IT'S A BETTER FIT FOR YOU???
BACK OVER TO YOU MR. STARLING...
Next: PART V: How is a Tailor Made Suit like a Supply Chain Coach?
PART V: How is a Tailor Made Suit like a Supply Chain Coach?
GIOVANNI with the MIDAS TOUCH:
OK Sherlock! Want to discover the gold? Want to solve the mystery? Well don’t hesitate to share your actual shipment history! Yo, dingbat. You got a story to tell. And if you operate under the delusion that a) no one can do it better than your current carrier, or b) even though you have no dedicated distribution staff, your current resource can’t do any wrong and they have the inside track on how to improve your transportation network optimization, or c) it’s cheaper to outsource to the “experts” than to grow your own—man you be smoking the dope! Or worse yet, you are the dope! What kind of analytical business executive are you? What drove you to this delusional brink?
Ok, so consider this. The tailor doesn’t touch the cloth until he takes and verifies your measurements, makes sure he understands your expectations for the finished product, and you have agreed to a price that fits your budget and expectations.
The supply-chain help analogy here is the rare and exceptional supply chain coaching organization. This type of helper organization is a) small and lean, and b) very selective about who they work with. Why? Because it takes trust on your part to be open, honest, and share the real data. The doctor can’t help if you don’t share your symptoms!
If you find one, it would be composed of multi-talented, multi-industry experienced down-to-earth people who come from your side of the desk. Resources worth their weight in gold (or operating cash) that can assuage your pain—but simultaneously offer up for your consideration a variety of alternatives consistent with your company’s strategic objectives, which generate positive cash flow for the organization (something you haven’t been thinking enough about, right?) And not only cure the “tactical” pain, but have already been vetted as far as their impact on the financial performance of the company! Perhaps a supply chain coach would suit you just fine!
So Einstein, do you still believe your buyer or other underqualified corporate lackey has the answer to all your transportation qualification, selection, and shipping ills? Are they encouraging you to turn the whole outbound distribution network over to Mrs. Robinson or her lookalike equivalent?
Maybe you should reflect on the context of your current situation? Are you satisfied with a 3PL tactical reactionary approach to carrier qualification and selection? Or will you think a little more strategically? To put it into perspective, how you would approach buying a suit? Like an "off the rack" 3PL? Or a "tailor made" supply-chain coaching solution?
So go ahead, ask yourself: will it be build to suit? Or suits your build? Hmmmmmm?
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