REDUCING RISKS OF AN ACCELERATED WAREHOUSE LAUNCH OR TRANSFER

April 2, 2014

By Peter Schmitz, Director of Operations, ASL Distribution Services

& Lee Banea, Operations Manager, ASL Distribution Services

Unexpected surprises can pop up for both warehouse service providers and the companies using those services. But with planning and forethought the impact on your business can be mitigated. 

In fast tracking a launch or transfer, customers many times may look at the rewards of outsourcing without paying sufficient attention to the considerable risks involved.  In today’s more volatile business climate companies may risk suffering financial loss as a result of supply chain disruptions.

Customers choose to accelerate warehouse outsourcing plans for various reasons ranging from diminishing service levels to the logistics provider terminating the contractual partnership.  These fast tracked plans to launch with or transfer to a new provider may present a myriad of challenges for both the service provider and the customer.

Factors such as complexity of the move or timing of the implementation may prove to be insurmountable at times.

Here are some factors to consider:

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Effective Planning and Project Management

The first step to lowering exposure to launch risks is to spend time on defining the key factors affecting the supply chain and follow up with detailed planning and analysis using planning tools such a project matrix and simulation systems to uncover ‘what if’ scenarios.

The customer should learn and understand how things operate in the 3PL environment and how to manage relationships with the 3PL provider and vice versa.

The presence of cross-functional trained leadership capable of generating the appropriate interactions and analysis at the right time, and committing the necessary resources to support the project is an effective tactic to mitigate risk. 

Establish Information Exchange Process

Third party logistics companies many times have incomplete information from contracting companies.  Likewise the contracted customers may have incomplete information from the 3PL.  In order to make a transfer or implementation as seamless as possible, there should be symmetrical flowing of information between both parties. Information sharing mechanisms should be deployed which could mean win-win results for both parties.

Some key information that should be accurate, timely and easily accessible include:

  • Costs

  • Capacities

  • Shipment plans

  • Demands

Determine Acceptable Key Performance Metrics

Adequate performance tactics and metrics are valid and effective tools to prevent risks. Defining and agreeing upon performance metrics ahead of time improves customer service and enhances successful partnerships. Well defined critical requirements with accountabilities are key to mitigating risks.

Determine Selection Criteria

A selection criteria needs to be put in place to assess service providers on factors such as their quality of service, reliability, flexibility and success stories.  Risk should be mitigated as far ahead as possible both strategically and tactically in order to reap continued success.

Adopt Best Practices

It is understood that there are times when an accelerated launch or transfer is necessary, and in these cases it is recommended that best practices be deployed to avoid or mitigate risk.  Researching the marketplace in advance to find service providers who meet your requirement can be pre-emptive. Other actions such as the issuance of a timely RFP, is always a good idea.

Companies benefiting from success are those who have a more comprehensive view of  risks and improved their processes and infrastructure in order to anticipate and respond to potential disruptions.  As a result they are further ahead in mitigating risk.

ASL Distribution’s risk management approach in this area includes a detailed project management plan, establishment of cross-functional resources from Operations to MIS with accountabilities assigned to all stakeholders. It is all about best practices and continuous improvement.  Utilizing best practices with over 50 years combined in our organization, our entire team with proven experience varying from the food industry to magazines and printed material;  with ISO and GMP compliance, ensures the right product is shipped at the right time, in the right condition to the right place with the right attitude.

We recognize that we must be competitive in all areas of the value proposition including Cost, Quality, Service and Innovation.

—We recognize our customers and their customers, do not always have standardized needs, and require a supplier who is flexible.

—We accomplish this through the continuous building of a culture of persistence that never quits.

For more information on our Supply Chain Solutions contact us: http://www.asldistribution.com