3PL Service Provider or Strategic Business Partner?

With companies’ needs changing, and the possibility of taking various services back in house, how does a 3PL service provider remain a valuable partner? For many client/provider relationships, a 3PL is no longer simply a service provider, but more of a strategic business partner.

In this 3 1/2-minute video, Adrian Gonzalez interviews Mike Glodziak, president of LEGACY Supply Chain Services, who discusses the 3PL trend shift from service provider to strategic business partner.

Video Transcription

Adrian: You know, my take on core competencies is that, and certainly this is more true today than ever before, your core competencies are continuously changing. I think for a lot of companies what they decide to outsource today will be different than what they will decide to outsource tomorrow or two, three, four, five years from now. It’s a continuously dynamic process. There might be things that they’re outsourcing today that they, for whatever reason, may want to bring back in-house sometime down the road. At the same time things that they may be passionate about doing in-house today that may decide to outsource down the road. I think that it’s ongoing. Where it used to be a one way street a lot of the times, now I think it’s a more dynamic fluid type of decision.

I think that puts the onus on the service providers on the 3PL’s to also be in a position to be able to respond and be able to serve their clients in a variety of different ways. Mike, you may be providing services five years from now that you’re not even thinking of doing today because your customers might take you there because they’re saying, “Mike, we want to bring this back in house, but here’s an area that we need some help in. You’ve got the technology, the people, the assets, so on and so forth that can help us, and we want to outsource this now to you.” That’s kind of my take on it. Your thoughts on that?

Mike: Oh, Adrian absolutely. I’ve been in the business long enough now that we are seeing those life cycles. We do have customers and examples of customers where they’ll call you up and say, “Hey, unfortunately, Mike, we’re having to pull this particular element at this supply chain you operate for us back in house” for a whole host of reasons. We don’t have enough time to talk about those today, but we see that happening, and three or four months later they’ll call me back up and say, “Hey, Mike, I know we took that last piece back, but here’s what we’re going to outsource next, and we think that your company can do a great job at it.” We absolutely see that.

What I take out of that is for so many of these customers that are clients are good at outsourcing figured out that, first and foremost, it’s about culture. It’s they’re comfortable with the cultural fit that they have with us, with Legacy. We’re their go- to provider versus, “Hey we’re going to but an RFQ out there,” and “Hey, we’re going to drive this down to pennies.” We’re absolutely seeing that shift right now, and that consolidation for many of our bigger customers where they’re going to a single provider or perhaps two providers in their world. What you see out of that, and why we invest in those relationships is, yes, one day something can go away from you and go back in-house or just evaporate, and, again, a quarter later you can get that call that says, “Hey, this new opportunity is coming at you, Mike.” So, yeah it’s spot on common Adrian.

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