Outsourcing 15
Agree review period required by 3PL Look for Synergies
before both parties meet to
maximise negotiation output
Synergies may exist where the 3PL can
Internally
offer additional activities cost-effectively.
Draft Terms &
agree
Send
Conditions and
ee or This is likely to occur when the 3PL’s
negotiation
Contract Negotiate
Agr
Schedules
walk away
start point
to 3PL cost base, especially management and
facilities costs, can be spread to include
these activities, which may include
If walk away
■
returns handling and rework
Agree
■
contract packing
BATNA ■ order-taking or order-management
call centres.
number of controlled dry runs. The final budgeted costs for these activities to Develop a Culture
decision to go-live should be made by ensure continued value for money.
the independent PMO. Pressure on the A pipeline of projects with a project
operation is more intense during go-live plan for the total set of activities should
than at any other time. Additional support Revisit the Solution be developed to track development
should be provided by both client and and for discussion within 3PL contract
3PL for approximately 4 weeks either The 3PL and client should jointly review the meetings. Actively involving the 3PL
side of go-live. Support should include operation before the next budget year for in the client’s supply chain decision
detailed operational tracking tools to
■
complex areas not first implemented making process, including supply chain
quickly identify issues and pinpoint the
■
variances of cost drivers from those strategy, will develop an innovative
exact cause. This support should provide modelled culture. Clients should leverage their
independent and pragmatic advice in
■
operational experience knowledge of the 3PL’s own strategic
building a long-term solution and raising opportunities. wants to feed the 3PL’s involvement. The
issues to the JPC and PMO. most fruitful outsourcing relationship will
Independent facilitation of this exercise be one wherein both the client and 3PL
can bring both client and 3PL together align their strategies for the future.
Post Go-Live Optimization to jointly discuss options to deliver
additional value.
Successful projects will quickly bed Summary
down and the focus should shift to Large transport operations should be
longer-term activities. Support of a remodelled by the 3PL as though a The ten steps described are applicable
consultancy at this stage will be helpful, new operation. Cost reductions may be to the main three instances of
as they bring seen through outsourcing:
■
structured thinking to longer-term
■
rebalancing the network
■
changing 3PL whilst in steady state
goals
■
vendor backhaul
■
changing 3PL after a network
■
innovative and creative thinking
■
reviewing the core fleet versus sub- transformation
■
independent facilitation. contraction mix
■
changing from an own account to
■
reviewing split channels, such as using a 3PL.
Focus should be maintained on service parcel carriers and own fleet
commitments, ensuring that the quoted
■
verifying the fleet size and balance At Accenture, we believe that the
solution is delivered in the long-term. of vehicle types Ten Steps are key to the successful
This is important with closed book
■
reviewing service levels. integration of a 3PL provider into a
contracts, where there is an incentive for client’s operation.
3PLs to boost profitability by reducing Large warehouse operations will see
the balance of service level against the cost reduction opportunities involving
agreed price. Price creep can also be the input of all stakeholders and Iain Prince and Michael Coe
an issue, especially around non-core including the experience of warehouse UK Supply Chain Practice
activities, such as ‘specials’ and ad-hoc operatives. Specific areas to target are Accenture
operations provided by the 3PL. It is inventory, total operational processes Tel. +44 207 844 4000
reasonable to challenge 3PL prices or and supplier management. www.accenture.com
June 2007 Supply Chain Europe
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