The Transactional Supply Chain Versus the Partnership Supply Chain

With the considerable increase in enterprises partnering with third-party logistics providers (3PLs), the portfolio of services offered has increased as well, yet many companies have lagged behind in taking advantage of those services.

At the advent of partnering with logistics providers 25 to 35 years ago, 3Pls typically offered an array of transactional services, such as sending out shipments, operating warehouse functions or booking freight. However, the current range of services offered has progressed to cover a panoply of strategic services, such as thought leadership, technology management, asset recovery, IOR/EOR services, big data analytics and robust reporting.

Yet, collaboration between 3PLs and their clients has lagged because many companies have not explored the new landscape. They continue to perceive 3PLs as a tactical partner rather than a strategically. Indeed, the majority of clients utilize logistics services such as warehousing and transportation, forgoing the latest developments in supply chain consulting and IT, trade and compliance services.

With the advancements in technology, clients can cultivate long-term savings through their collaborative relationship with a superior 3PL. Nearly every company sustains positive results with the implementation of third-party logistics services from lower labor and capital costs at the outset. However, cost savings begin to decline within several years as clients become comfortable with the status quo or fail to upgrade and innovate over time. The prime method to preventing these declines in ROI is to move the 3PL relationship from transactional to strategic.

Flash Global provides its clients with the strategic vision necessary to create a dynamic, evolving logistics program that drives key performance indicators (KPI) and exceeds performance in service level agreements (SLA). If the partnership remains transaction-based, the client loses the opportunity to derive benefits from the expertise of a holistic, full-service 3PL whose experts will design a continuous solution to drive value throughout the supply chain.

Driving Savings and Benefits with Dynamic 3PL Services

Today’s typical logistics service provider has adopted some collaborative, strategic services in their portfolio of offerings. Some offer IT solutions that enhance visibility along the supply chain, and some conduct analyses to identify inefficiencies and redundancies, and some will offer proposed solutions to cutting costs.

Yet, this approach represents a transactional method to strategic logistics management by offering advanced solutions on a piecemeal basis. The most advanced 3PLs take a holistic approach, with a comprehensive supply chain solution accessible to any client in any industry. Thus, Flash Global not only has an integrated program of specific supply chain solutions, it offers its clients expertise in strategy, product control from entry to delivery, proactive account management for productive partnerships with clients, and superior technology for high-level visibility in global operations.

One critical service that is increasing in importance is enterprise risk management tailored to logistics, which works to identify and mitigate potential disruptions along the supply chain, many of which can originate in emerging markets. This can include identifying choke points and proposing methods of minimizing the losses with a comprehensive system that has the capability to monitor plants, transportation lanes, shipments and suppliers. Moreover, sophisticated 3PLs can track incidents and apply predictive analytics to forecast future disruptions along a network. This type of big data insight improves accuracy in forecasting, reduce costs and optimize supplier performance.

With IOR/EOR capabilities in more than 80 countries, over 700 forward stocking locations (FSLs), 15 distribution centers and five regional command centers across the globe, Flash Global has the visibility and tools to provide not only an overview of risk exposure to clients, but also suggest appropriate responses to risk events that may be local or systemic.

relationship supply chainFrequently, clients gain a deeper understanding of their supply chains through a collaborative relationship with their logistics service provider with greater insight into hidden costs and the development of innovative solutions. For instance, the strategic alliance will provide a comprehensive overview in face of unexpected natural disasters or labor related disruptions in critical links by collecting and analyzing risk intelligence data across an entire supply chain.

These assessments can uncover critical weaknesses with supply chain partners, point out potential risks prior to an actual disruption, and give the client the ability to develop a robust contingency plan that does far more than shift operations in the face of risk events.

Strategic Partnerships Yield A Greater ROI than Transactional 

Exploiting a strategic partnership with a global 3PL that offers comprehensive services and holistic solutions produces benefits that go far beyond transactional savings. With greater insight, companies become proactive and stay one step ahead of the supply chain. They do this not just by identifying potential threats and developing contingency plans. An integrated logistics program gives the company greater competence in uncovering opportunities for cost reductions and streamlining. Thus, adopting a strategic relationship with a global 3PL can generate continued savings for years to come.

With Flash Global’s innovative, web-based IT solutions, a client will achieve greater transparency and control across its entire supply chain worldwide.

Ready for global expertise, optimized technology and services, product control from end-to-end, proactive account management and comprehensive solutions to supply chain risk? Flash Global can be implemented quickly, frequently in less than two months. If you are looking for a true 3PL global partner, contact Flash Global today.

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