3 pl selection demystified, ulery 29apr13
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Transcript of 3 pl selection demystified, ulery 29apr13
WERC 36th Annual Conference 3PL Selec)on – Demys)fied!
Robert Ulery, Vice President, Johnson Stephens Consul@ng, Inc.
Hello!
• Who is this guy?
• What’s his background?
Should I Listen to Him?
1. I’ve worked on several sides of 3PL
2. It might be awkward to leave now
Today’s Goals 1. Learn: – How to engage a 3PL.
– What to share with them.
– How to ask for (and get) accurate proposals and pricing.
2. Understand how 3PL works: – When does it make sense?
– When does it not?
3. Illustrate a proven selec@on process.
Why Outsource?
Good Reasons:
• Capacity • Flexibility • Access to technologies
• Capital avoidance
Bad Reasons:
• Save money
• Transfer risk
The Matrix Strategic V
alue
Non-Core
Competency
Outsource
Retain
Offer to Others
Improve or Outsource
The Tradi@onal Approach
• Approach a 3PL to test the waters. • Ask for “direc@onal pricing.” • Decide to get two or three more quotes.
• Receive quotes in different formats.
• Put together an RFP and try again. • 3PLs begin to lose faith. • Make a selec@on based on price.
Lessons Learned
• RFIs can be a waste of @me.
• “Direc@onal pricing” doesn’t exist. • 3PLs need several weeks to respond. • You need to specify the commercial structure.
• You have homework.
• Don’t use that old RFP everybody passes around.
Project Objec@ves
• The objec@ve is to find a business solu)on, not benchmarking.
• This is more of a solu)on design process than a typical procurement process.
• Your approach should provide the 3PLs maximum flexibility versus a predefined technical solu@on.
• You need to determine what each 3PL will do versus what the candidate can do.
• Understand the sensi@vity of cost versus improved service levels and capabili@es.
Beaer Approach
STEP 1 Admit you have a problem.
Beaer Approach
STEP 2 Assess the market.
Beaer Approach
STEP 3 Establish project @meline.
Beaer Approach
STEP 4 Understand your opera@on’s work content.
Beaer Approach
STEP 5 Gather lots of data. • Details, not averages
• Weekly volumes, not annual
• Inventory history, not average turns
Beaer Approach
STEP 6 Create a custom Request For Proposal.
Beaer Approach
STEP 7 Give the market @me to respond.
Beaer Approach
STEP 8 Tour bidders through your opera@ons.
Beaer Approach
STEP 9 Create scoring criteria, including objec@ve
and subjec@ve factors.
Beaer Approach Objective
Beaer Approach Subjective
Beaer Approach Composite
Beaer Approach
STEP 10 Select finalists.
Beaer Approach
STEP 11 Meet the key people.
Beaer Approach
STEP 12 Pick the provider you like best.
Aber The Selec@on
1. Nego@ate a fair opera@ng agreement.
2. Expect the best, prepare for the worst.
3. Invest in the rela@onship.
Call Me if You Get Stuck!
Robert Ulery Vice President Johnson Stephens Consul@ng, Inc. [email protected] 678-‐778-‐7630 www.johnsonstephens.com