29 June 2000 | David Arminas
Successful partnering with a logistics provider requires careful analysis of its capabilities and acceptance of the need to share data, an academic has warned.
"Having an agile supply chain means working closely in partnership with companies that can provide essential services," Martin Christopher, professor of marketing and logistics systems at Cranfield School of Management, told Management Centre Europe's international logistics and supply chain conference in Brussels this month.
"The attitude should be, 'we are not going to own the logistics company, but work with it as though it were part of our business'," he said.
Although the provider will be a specialist, never outsource the control of a process - outsource the execution of it, explained Christopher.
Choosing a partner requires particular skills, which are not always evident in the people that set up a deal,he warned. "Traditionally, we have kept logistics providers at arms length and buyers have been charged with overseeing the relationship.
"But what sort of training did we give them in the past for doing that? How to negotiate, do a better deal and squeeze a better price, and how to play one skill off against another."
Some buyers negotiating deals may not want a logistics provider to get close to their company, as that can reduce their control, said Christopher.
"We walk a fine line a lot of the time - there's a lot of sensitivity involved," said Bill Horrocks, vice-president of solutions design and implementation at US logistics company Ryder.
"You may have a vice-president of logistics who's been told by his executive to outsource and might be thinking, 'I'm going to lose my empire and my staff'," he said. "He could then start building up a case against having a third-party provider."
Once the partnering decision has been taken, the linking of IT systems becomes all important.
"True partnering is finding out where all the data lies," said Horrocks. "A good logistics firm will let the client know about any gaps in the data that could affect a total logistics package."
Ronald Jordan, director of business development in Europe at Belgian logistics firm Fritz Companies, agreed. "The real added value in the chain is what is in the planning stage and coming down the manufacturing line."