July 14, 2014

Following a full review of what to ask potential 3PL (thid-party logistics) providers, we resume our #3PLQuestions series today with a look at why you should discuss the possibility of operational bottlenecks.

Siggi's Bottleneck
Your 3PL needs to know where the bottlenecks are (Photo credit: Xjs-Khaos)

Logistics professionals work at the real world intersection of simultaneously avoiding disruptions to established plans and making plans for them.

A sound supply chain strategy incorporates not only the most robust, efficient plan to deliver goods and services, but also hires those flexible enough to adjust activities when that plan falls apart.

For business owners, the latter quality can be easy to overlook when choosing a 3PL service. Every provider can tell you what they can offer when everything runs perfectly, but often their answer to what happens when things go wrong is more telling of the relationship your business will have with them.


What to Ask Your 3PL About Operational Bottlenecks

The more specific you get about your own business, the better the answer you’ll receive from a prospective 3PL provider.

Draw up some scenarios that have occurred in the past (or that your managers live in fear of happening in the future!) Present the scenario(s) to your provider, then sit back and let them answer.

While situations specific to your business are best, these are some more general examples you could include in your questions:

  •  A large order needs to be picked and shipped on much shorter notice than our standard agreement (define a time period relevant to your industry); what will you do for us?
  • A product recall requires us to bring items back into stock from various stages of the fulfillment process. How do you assist us with the planning?
  • Our product gets rolled from a scheduled shipment at its origin point of manufacture. What alternative arrangements can you suggest to ensure meets the original delivery schedule?
  • A labor dispute is rumored at a location that is key to our supply chain. How do you help us explore alternative routes and when do we make the decision to implement them?

Pose as many of these situation questions to your 3PL as you require to get a feel for their ability to plan on the fly.

If you struggle with specific situations, try to at least focus on hypothetical scenarios that apply to your industry. The more general the question, the more vague an answer can be, so it pays to put some thought into your interview to give your potential provider an opportunity to deliver a satisfactory answer.


Aim for the Best, Plan for the Worst

Workflow for Flagged Revisions
Workflow Planning in Action (Photo credit: Wikipedia)

If possible, also add a worst case scenario to your interview questions. Make this something extremely unlikely but which will test the hypothetical resources of even the most experienced logistics professional.

What you’re looking for in worst-case scenario planning is the ability to understand and mitigate the risk to your business. Disasters are largely unavoidable and rarely the fault of the 3PL, but they should have an intimate understanding of the threat to your company and a feel for the priority actions that will help minimize the impact to your operations.

Finally, ensure that the level of experience and expertise in those you interview is present in the team that will be handling your business.

In tighter operations this is less of a challenge, as specialist knowledge runs deep and decision makers are more readily accessible. But in more expansive organizations, even with a wealth of resources and experts that answer your interview questions, you’ll need a team that you trust can deliver on those alternative plans.

By getting these specific questions out in the open early on, you give both parties a better idea as to what to expect from the business relationship. Hopefully these worst case challenges never come up, but if they do you’ll feel safer in the hands of a 3PL who knows your industry and has a passion to serve your customers.


May 13, 2014

ADP LogoWhen Capacity LLC first met our clients at ADP, the world’s largest provider of payroll services, they were not happy. The company was then using several warehousing and manufacturing facilities to ship and store all of its products, including time clocks, hand scanners, ID badges and software. Some of the logistics providers were also processing returns and handling collateral materials.

In addition to the inefficiencies inherent in the process, the inventory fulfillment system was also being handled manually. Errors abounded. When you consider that capturing a unique serial number on each time clock for both outbound shipping and returns management is one of ADP’s critical requirements, and that it was being processed by hand, there was a great deal of room for improvement.

 The Capacity LLC Solution:

Capacity LLC was well positioned to solve ADP’s logistics dilemma. Through our work with pharmaceutical companies, we had already developed the capability to electronically capture lot, batch and serial numbers throughout the supply chain for selected Stock Keeping Units (SKUs) by scanning serial numbers. Daily reports of shipments and returns include this information, critical to the proper tracking of any and all products. This works well for shipments as well as for returns.

By consolidating all shipments and returns within a single warehouse, Capacity LLC helped ADP to achieve a robust, integrated and highly accurate solution for serial number asset tracking. ADP’s two initial divisions, Majors and SBS (Small Business Services), enjoyed such great success with our solution that they migrated the National’s Division over to Capacity LLC, consolidating all of its third party fulfillment activities under one roof.

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May 8, 2014

Question mark bubbleWhen you make the decision to outsource your order fulfillment, next you need to plan what you’ll be asking prospective logistics providers.

Because of the depth of the partnership that you’re likely to forge, with a company that executes a significant portion of your supply chain, it’s a lot easier to get the decision right first time around! Continue reading 8 Important Questions to Ask a Logistics Provider

April 14, 2014
English: A Union Pacific Intermodal Train does...
Despite adverse weather, railroads started 2014 in strong fashion (Photo credit: Wikipedia)

We talked about the resurgent U.S. railroads at the turn of the year, and their role in fueling wider economic growth, so it’s exciting to see that volumes are on the rise again.

During the first quarter of this year, railroads moved 3.8% more than the corresponding period in 2013.

“U.S. rail traffic rebounded strongly in March 2014 following a subpar February,” reports John Gray, the SVP of  the Association of American Railroads. He added in a statement that last month’s performance shows there is “every reason to be optimistic that 2014 will break 2013’s intermodal volume record.”

The encouraging data comes in the wake of a long and difficult winter for much of the country.

Despite this adverse weather, intermodal transport solutions rose to the challenge and set 2014 off on a fine footing for the rest of the year. Railroads took the strain even as trucks found it slow going on the country’s highways and interstates, demonstrating that having a variety of freight options available is a must for managers running extensive supply chains.

And for businesses interested in eliminating waste from supply chain costs, understanding the many options for getting goods from point A to point B (and C, D, etc!) is a pre-requisite. With so many complex variables at work, knowing your way around the world of transport helps both to plan more effectively in advance and respond to supply chain challenges as they arise.

Hopefully there’s more volume being pushed through your business as the year progresses, so make sure you’re managing it efficiently and cost-effectively!

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April 10, 2014

Korres LogoThe Challenge: Major Beauty Brand 

Korres Natural Products had worked with Capacity LLC for almost a decade, growing from a very small niche player into a national brand. Today, its products are known around the world. When Johnson & Johnson acquired the manufacturing and licensing rights to the brand, it needed a third party warehousing and logistics provider that knew the existing business and could also support the growth it was expecting to drive. J&J also needed a logistics provider that could comply with its strict Current Good Manufacturing Practices (cGMP) and other requirements.

The Capacity LLC Solution

Capacity LLC quickly rose to the challenge presented by J&J. We enhanced our existing warehousing and fulfillment capabilities to meet J&J’s complex requirements. We took the logistics burden off of J&J, enabling its management to focus on sales and marketing. As J&J radically ramped up the Korres business and began shipping for the Home Shopping Network, the company required a multi-tiered integration to its Enterprise Resource Planning (ERP). This required an extensive expansion of Capacity LLC’s assembly efforts, and the implementation of all of J&J’s compliance requirements.

Every area of Capacity LLC’s business has been subjected to Johnson & Johnson’s strict requirements for external manufacturers and partners, mandating Standard Operating Procedures (SOPs) for the complete range of our operational and support activities. Capacity LLC has increased the number of in-house engineers, enhanced business continuity planning, and radically expanded its offerings in numerous ways. We have met the challenge of our client’s expansion by expanding ourselves.

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