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Selecting a 3rd Party Logistics Provider: What Questions Should Companies Ask Before Outsourcing?

What questions should companies ask themselves to make sure they have the right skills to create and manage successful outsourcing relationships? Set yourself up for success by investing in an internal core competency in outsourcing.

In this 2 1/2-minute video, Adrian Gonzalez interviews Mike Glodziak, president of LEGACY Supply Chain Services, who outlines the questions that companies should ask before outsourcing to a 3PL, to ensure successful partnership.

Video Transcript

Adrian: What questions should companies ask themselves to determine if they have the right skills to create and manage a successful outsourcing relationship, to asses whether outsourcing is a core competency of theirs?

Mike: All right, again two quick comments. One, if you’re not going to invest in the relationship, if you’re not going to manage the relationship you’re setting yourself up for failure, we talked about that. Number two, I think the secret sauce at the end of the day is to develop that internal competency for outsourcing and to invest in that internal competency. I think, to be more specific, the questions I would ask myself if I was a client about to go down that outsourcing path it certainly would be my statement, work and scope, do I understand that? I would ask myself the question, “Do I as a client really understand my own processes? Can I effectively articulate those processes to the outsource provider?” Because if I can’t do that I’m setting that outsource provider up for failure. That’s an important conversation.

The same conversation with the performance measurements in metrics. Do I understand my tactical measures and what my strategic measures truly are so I can share that with my provider and get them to do the very best they can for me? I think the last question I’d ask myself if I was about to go down that path as a client would be, “Do I have any information gaps?” Whether that be volume metrics or forecasts or growth numbers or perhaps it’s some type of product detail. If I’ve got some gaps in my information I’ve definitely got to fill those in before I go down that path. That’s just fundamental to the success. I think, at the end of the day to sum it up, I really believe in that outsourcing core competency in the clients who are successful have figured that, and it’s a great conversation.

Adrian: Great, I think that’s a great exercise for supply chain district executives to kind of think about and do over the next few days is really to think about whether outsourcing is a core competency and whether they have the skills and the attributes as we discussed today to make it successful.

 
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