Carrier relationship strategy

Relationships for supply chain success – Strategy – CSCMP's Supply Chain Quarterly

carrier relationship strategy

The lessons learned from these surveys drove opportunities to improve carrier relationships. Understanding Carrier Strategy and Performance Topic Areas: Transportation, Strategy, Metrics From the regressions, clear relationships between. Developing a carrier management strategy allows you to be What is your carrier management strategy related to modes, relationships, and.

It means cross-functional teams with a purpose other than political correctness. It means that everyone has, if not a voice, at least a hearing in product development and discussions about stock-keeping unit SKU extensions. If all that seems alarming, you're not ready to manage external relationships. They can't possibly succeed until your company is master of its own domain. LSPs, consultants, and worse Once issues within the company and within the greater supply chain have been satisfactorily addressed, don't forget relationships with service providers.

carrier relationship strategy

This need is particularly acute when logistics service providers LSP are involved. Building a successful LSP relationship is absolutely essential to their successful use. Open and full communications are vital from the outset, beginning with the evaluation and selection processes. Multilevel working relationships throughout both organizations provide the key to making processes work and to effectively solving the problems that inevitably crop up.

And the work doesn't end there. LSP relationships, like marriages, require constant effort and continued attention.

Pillars to a Successful Transportation Experience: Carrier Management - Transportfolio

The LSP also needs to know about upcoming events, changes in strategy, and new products and customers— things that many companies used to keep "secret. You and your LSPs need to engage in regular dialogue about where and how they can add value to what you are doing. It's more difficult to have a relationship with consultants that spans functions and managerial generations.

But the quality of relationships with consultants can have a profound effect on the quality and extent of outcomes. For best results, mutual trust and open communication are required. The more your consultants know about what's really going on and the more you can tell them, the better their chances of getting to the heart of the issues and devising on-target solutions. As for software providers, they are often portrayed as salespeople without scruple or inhibition.

When it comes to evaluating vendors, your job is to look for and assess the qualities that can make for a positive mutual relationship all the way through a successful implementation. Like all other aspects of the supply chain, this is about more than simply making a purchase. It is about having a sustainable relationship with someone who can play a key role in your long-term supply chain success.

The Role of Consultants Logistics service providers LSPs are not the only third parties lurking in the underbrush of supply chain management. The weeds are also full of management consultants. They're at every conference, seminar, and convention. They're on the Internet with web sites, e-newsletters, webinars, and spam.

They're in all the trade publications. They're speaking; they're writing; they're selling endlessly. What do they do? Do they help—or hinder? Do they really offer a value proposition? Some perspectives At its best, management consulting can be a noble calling. It's a high-minded endeavor, requiring enormous amounts of both talent and integrity as well as a strong sense of mission and urgency. At its worst, it is an embarrassment and a scandal.

To be honest, there have been some spectacular failures in consulting projects. Whatever your view, the emergence of supply chain management as the business focus of the new century has attracted consultants of every imaginable variety. Some have been at it for years, evolving along with the field. Others are new to the game, and they seem to think that adding supply chain management to their list of service offerings is enough to get onto the playing field.

The difference between consultants and advisers There was a time when great care was taken to distinguish management consulting services from management advisory services.

The distinction has faded with time.

Strategic Shift: Carrier Relationships

But the implication is that advisers provide feedback and informed opinion, and that consultants take a more active role. Consultants make decisions, acting on behalf of the client.

They design and implement processes, facilities, and systems—in short, they do the hands-on work. Consultancies offer a diverse collection of different business models as well as approaches to problem solving.

Let's begin by trying to sort out some of the fundamental types. The mega-firms This category is made up of huge organizations with thousands of people. They may be partnerships; they may be corporations.

They are increasingly multinational. Many of the mega-consultants have their origins in the giant public accounting firms. Several years ago, each of the so-called "Big Eight" U. They generally attempted to be all things to all clients, and they would undertake consulting in any channel that held the promise of growth or profit.

As they created multinational accounting conglomerates, their consultancies likewise added the appearance of international capability, which tended to be more promise than practice.

Today, after mergers, acquisitions, and divestitures, their former consulting entities are barely recognizable. Accenture spun off from Arthur Andersen, which itself disappeared, thanks to Enron.

Deloitte Consulting, product of yet another merger and acquisition, retains its corporate identity but is legally a separate LLC entity. The overall business model consists of a hierarchical, pyramidal organization, dependent on sales generation by a relatively small number of rainmakers to provide billable hours for large numbers of analysts and managers. Thorough methodology and process development is supposed to allow relatively inexperienced consultants to tackle complex problems in consistent ways.

This model has been likened to bringing in busloads of bright kids, who have been both indoctrinated into the corporate culture and provided with workbooks full of process descriptions and solutions. They must then hope to come across a client who is asking the right questions.

Few of these firms were willing to bring in more seasoned, more experienced, more independent-minded, and more expensive old pros. It's not so much an age issue as a business model issue, abetted by a cultural conformity.

Some independent consultancies have become mega-firms. Some of the early leaders, such as Booz Allen Hamilton, continue to prosper, while some others have fallen on hard times or have been sold off. Big and important, but not huge A handful of consulting firms concentrated on strategy but took differing directions. Some tried their hands at tactical implementations, and they remain successful in addressing operational issues with strategic implications.

Others focused on taking equity positions and managing corporate operations. Several entities focused on performance standards, productivity, and cost reduction. A few pioneers survive, but just barely. Their business model tended to be based on the engagement of contractors, who are off the payroll as soon as they've completed their assignments. The permanent cadre comprises successful salespeople along with a handful of top executives. There were dozens of such firms, the majority of which have disap peared.

One of the biggest was United Research, which has dropped off the map. But a few have survived. For example, the engineered standards and method ology-based consultancy H.

Maynard remains an active player in the world of work measurement. Some consultancies focused on such operations as manufacturing and logistics in the early days. One leader in the movement survived an unfortunate acquisition, and has rebounded as a broad-based global consultancy.

carrier relationship strategy

Others, including some specializing in physical distribution, have disappeared. Small and mid-sized firms The small and mid-sized consultancies tend to be built upon limited but deep functional experience. They come and go, but some have remarkable staying power.

Cultivating Healthy Carrier Relationships

Too numerous to cite here, they can be local, national, or global in coverage. They may be franchises, or they may be real companies. They may affiliate with "stringers" in several locations, handing out business cards to anyone with a suit and a laptop.

carrier relationship strategy

Or they may grow more organically. Some achieve greater functional breadth through working partnerships with other consultancies and achieve geographic coverage with multinational alliances.

They may follow the hierarchical organization model, or they may be flatter partnerships with more hands-on consulting involvement from senior partners. The supply chain field has spawned many of these operations, and many of them deliver cost-effective and sustainable results.

Some are highly specialized, while others offer a broad range of supply chain strategy, planning, and execution services. Sole practitioners Next come the sole practitioners. The range of services they deliver is staggering; they cover everything from freight-bill audits to supply chain strategies. The solos run the gamut from internationally renowned specialists to prematurely retired managers to out-of-work inebriates.

carrier relationship strategy

These sub-categories are not mutually exclusive. Unlike in aviation, no lessons are required, and there is no meaningful certification and licensing process. The only barrier to entry in the consulting marketplace is a failure of nerve. There are many, many really excellent one-man and one-woman shops. For the right kind of problem, they can often offer an on-target solution at the right price. The best of them recognize their limitations, and they are brilliant at enlisting other specialists to work on solving the fundamental problems.

The worst of them believe their own press clippings. Because of their egos, they hesitate to bring in people smarter than themselves to help deliver the right answers. The recently unemployed complicate the picture considerably. They typically have no training and little real experience in being a consultant.

They generally have no idea of how to price services or of what's involved in scoping and executing analyses and solution development. They often don't understand the subtleties of communications, client relationships, and selling. The academics Many respected academics practice consulting on either an institutional or a private basis. Often their consulting includes a research component directed at a technical solution to a specific problem. Sometimes they are able to assemble study and research teams of graduate and undergraduate students to observe and assess operational problems and practices.

Other times they might conduct and analyze industry surveys. Sometimes they are called as expert witnesses in litigation. There are times when the right approach to a problem is to build a team with academic and consulting components.

That way there's an effective blend of both esoteric and practical solutions. Turnaround specialists and litigation support Turnaround management specialists are not really consulting firms, although they employ many consulting techniques in their cost-slashing blitzkriegs. Two well-known leaders in the field have senior management with extensive backgrounds in cost management consulting. They also manage either organic or affiliated investment partnerships.

Aside from competency, what's important in a consulting relationship are "chemistry," style, and comfort. Technically speaking, litigation support isn't really management consulting either.

But many very senior consultants deliver litigation support. Usually this service consists of providing expert witness input for a case, which could take the form of testimony at trial, depositions, or written summaries of observations and conclusions.

Other roles, which may get a little nearer to consulting, include topical education for attorneys, collaboration on case strategy, deposition preparation for either attorneys or deponents, and offers of proof development.

It is quite common for opposing experts in a case to be well-acquainted with one another and with their likely expert positions. The real pros are those who turn down a lucrative expert role when they are not persuaded of the merits of the case or when a negotiated settlement would be both achievable and an obviously better solution for all parties. Take, for example, a situation where freight volumes are peaking and the shipper has short lead time orders.

Carriers in the route guide decline the business and the shipper has to resort to the spot market where they pay top dollar for capacity. With the implementation of a TMS, managers have the ability to shift their focus to developing route guides that reduce rejection rates and lower costs, even during spikes in volume.

Improving Shipper/Carrier Relationships

Declining route guide depth. Perhaps the rates offered by the top carriers when they first won the business are no longer valid, and these transportation service providers are going elsewhere for loads.

With the benefit of a TMS solution, the managers can realign the route guide. They can weed out the carriers at the top of the route guide that are not accepting tenders, and avoid using low-tier providers that are more expensive and less efficient than first-choice incumbents.

On time delivery slipping. Planning for seasonal peaks. As mentioned above, capacity is often scarce during peak demand seasons. Finding trucks during these periods is even more challenging for shippers that have failed to effectively manage their relationships with carriers.

TMS solutions can help shippers to plan for spikes in demand by, for example, identifying carriers that may be open to the possibility of more freight in return for assisting when capacity is in short supply. Aligning with service providers. When carriers and shippers are not on the same page, the result is often miscommunication and a lack of transparency. A TMS can help to keep the parties in synch by providing common performance data.

This is particularly important when there are multiple carrier locations for single customers, and the flow of information between carrier and shipper is complex. In some cases the nature of the business is not conducive to the close monitoring of carrier performance. Take, for example, a shipper in the mining equipment sector, where customers are widely dispersed and only require a handful of shipments per year.

It is difficult to develop rich data sets on transportation service providers when shipment activity is low and confined to a few lanes.

Carrier Relationship Management