FulfillmentServices

I have been asked to provide several key definitions surrounding the Supply Chain:

Supply Chain Management is the organization, planning, control and execution of a product from development and purchasing, through production, warehousing and distribution to the final customer in the most cost effective way possible. 

Logistics management is the planning, implementation and coordination of the details of the supply chain.  

Third Party Logistics (3PL) is the function by which the owner of goods (The Client Company) outsources various elements of the supply chain to one 3 PL company that can perform the management function of the clients inbound freight,  warehousing, order fulfillment, distribution, and outbound freight to the clients customers.

The Allied Group is a 3PL provider to the Life Science industry.  While we don’t create the product we assist our customers with the logistics on the assembly, kitting, warehousing and distribution of medical devices to physicians and consumers.  We are an outsourced Supply Chain Management solution.

Love him or hate him Bill Belichick knows football. Year after year he baffles the draft guru’s and picks players that no one ever expected him to pick. It is fun to watch the draft guru’s opine why they are right and try to convince us indeed Belichick made a mistake. Yet year after year the Pat’s win. Watching the draft unfold made me think about what made the Pats so successful.

Like any winning franchise the Pats have a system that they constantly work to improve upon. They depend on the 11 players on the field to act in unison to be successful. They like smart and talented team players who can work within the definition of the system they have created. They don’t need the most talented player at any one position to win. They win because the 11 on the field all know what is expected of them and their teammate’s so they can react to the unexpected.

As a company that offers business process outsourcing solutions we have built our company on similar principles. We work hard to create an environment where we have created repeatable systems to minimize quality issues. The Allied Group has used this system to help create supply chain management strategies that work for our customers. We don’t have anyone on our team that can run the 40 in 4.23 seconds but we do have a group of people dedicated to a common cause of exceeding our customer’s expectations. When a group of people work together as a team and they posses a common goal they can produce extraordinary results.

Time will tell if the picks the Pats made were wise or not but if they have the skills and learn the system I bet they will be OK!

Anything that we consider an accomplishment usually took great effort to achieve. If it were easy, we would not look upon it as an achievement. What is a hardship in the moment will add to our sense of accomplishment at a latter date. Many of my accomplishments grew out of my failures. I have learned as much from my mistakes in life as I have from my achievements.

Failure gets a bad rap in our microwave culture. People want instant gratification, but it is in the struggle that builds character.  As Edison once said when inventing the light bulb about his unsuccessful attempts to discover the light bulb “I have not failed. I've just found 10,000 ways that won't work.”

The implementation of supply chain management strategies for life science companies have become a real test for The Allied Group. We take great satisfaction from our achievements.

The Allied Group specializes in assisting medical test kit companies build and distribute their lot controlled kits to their end users typically consumers and physicians. They understand the science but they need help with the logistic supply chain management issues.

We develop Supply Chain Management Strategies that enable them to kit, distribute and invoice their customers. I essence we become a one-stop shop for companies back room operations. We currently work with ViaCord, Signature Genomics and NTD with kit building and distribution. Further we have helped Depuy Ortho Visc with their marketing efforts.

How about you have you learned from your success or your failures?

Wow, you guys are brilliant! I can honestly say that I have not heard that statement too many times in my career. Those words were spoken to The Allied Group team by the member of a genomic testing company. I have to be honest; I had to ask my son who is in medical school to explain everything his company did. They were brilliant; we were a company that could supply them with business process outsourcing solutions like supply chain management, marketing solutions, contract packaging and direct mail fulfillment services. 

We entered a dialogue and one by one we were able to help them improve their business processes.  They understood what they do best which is the science and the laboratory to process the blood.  We understood how to market the service, create a package that we could ship their clients and how to bill the client for the service. We became part of their back room operations. 

In my previous blog I discussed some of the supply chain management principles used in both 3PL providers as well as for trips to the back country. It is useful to consider some guiding principles for Supply Chain Management Strategies. They act as a reminder so that the proper effort is exerted. They are the checks and balances of Logistic Supply Chain Management. Every decision, change, or idea should be judged against these principles to ensure that the criteria of the principles are met. For those with an extensive familiarity with Supply Chain Management Strategies, these principles become second nature. For those who are still developing that level of experience, I advise thinking in terms of the following:

Planning:   Planning is the most critical aspect of any logistical event. Complete plans must be made to cover all likely courses of events. Furthermore, contingency plans should be made for the most likely problems, such as inclement weather or a participants health issues. Planning effort should be given to what-if scenarios. What if we can’t cover the distance due to inclement weather, do we have time on the back end to make up for a lost day? Finally, planning should include numerous decision points that act as balances against possible drift. This keeps the trip streamlined, promotes momentum, and ensures good anticipation.

Efficiency:  Every resource and the way it is used must produce the maximum positive impact possible. Resources that are used infrequently, such as luxuries, will burden the expedition and make logistical management slow and unresponsive.

Effective: There has to be a reason for every logistics effort, and this reason has to promote the success of the trip or enable an objective or goal that will promote overall success. There is no point in pushing many resources at an effort that will have negligible positive impact on the expedition. Every resource and the way it is used must have an effective impact on the progression of the expedition towards its conclusion.

Simplicity: In times of stress or difficult conditions, a simple logistics plan is more likely to survive than a complex one. In project management terms, this simplicity can be achieved by identifying a critical path with as few links as possible. Effort should be made to achieve this critical path.

Flexibility: Despite the best planning, things will not always develop in the way that they were envisioned. For this reason, a flexible approach to the management of logistical effort is required. The ability to anticipate and react to situations in an appropriate and timely fashion is essential.

These principles make it abundantly clear that it is not only impossible to produce a logistics capability that provides for every eventuality, but it is counterproductive and undesirable to even try to do so. For this reason, there is an element of risk involved with every logistical and planning decision. A balance must exist that allows logistics to be robust enough to be effective yet not so cumbersome that it becomes an uneconomical burden. Erring too far in either direction can place a trip at risk. Achieving a good balance reduces overall risk of failure. The primary responsibility of the planning and logistics team is to achieve and maintain this balance. The trip organizer must control this balance, especially when responsibility is devolved to area or function managers. It is easy to become so engrossed in one’s own responsibility that one forgets the overall picture.

Outside my family, some of my passions in life are rock climbing, backpacking and mountaineering. In many ways these passions are complimentary to my profession of supply chain management strategies. Both of them require a keen eye for detail and the need to apply logistic principles.

At a very basic level, good Logistic Supply Chain Management will result in a more cost effective, more efficient, and more enjoyable trip for the participants. At the highest level, good logistics are critical to the safety and well being of the team members.  

Logistics deals not only with the tangible items like food, shelter, equipment, clothing, transport and the other physical elements of an trip, but it also deals with the participants. The central theme of logistics is to provide physical items to satisfy people’s needs. Logistics then is the key to assisting people so that they can accomplish a task. 

Poor logistics may have a negative effect on the morale of the participants and their ability to perform. The maintenance of morale then becomes a logistical effort. To deliver these physical and personal components in a coherent and effective way will provide the conditions that allow the team to perform.

In the next post, I will describe some of those key logistics principles that good 3PL providers will use. These check and balances should be integrated into good supply chain management strategies. 

Does your 3 PL provider understand your business? Do they take the time to comprehend your logistic supply chain management strategy? Do they understand what you are trying to accomplish and recognize what is important to you? What is their supply chain management strategy does it fit with yours? Have they built metrics around those key aspects of your business? Do they understand the quality and regulatory needs of you business? Do they act like a key consultant?  

During the selection process for 3PL providers it is important to ensure that the vendors you are considering understand the quality, regulatory and logistic supply chain management goals of the project. You want a vendor that understands your needs and can respond to them.  You will want a vendor that asks for frequent, open and straightforward communications.  

During this process you need to assess the 3PL providers ability to understand and respond. Do the potential 3PL providers have the ability to anticipate and respond to your needs? Do they have the ability to manage and address issues that arise? You are looking for a provider that can offer suggestions for improvements to your logistic supply chain management strategy to ensure that you are as efficient and you can be.

There is a vast difference in approaches 3PL providers take to achieve customer satisfaction. The simplest form of customer satisfaction is to understand if your 3PL providers will accomplish what they say they are going to do.

You need to go beyond what the potential 3PL providers have told you or what is written on their website.  You need to understand the potential 3PL providers' supply chain management strategies and their strengths and weaknesses surrounding this strategy.  Know whether they have been successful in developing similar logistic supply chain management programs in the past. Have they been on time and on budget?  During you due diligence do they meet your deadlines?  The potential 3PL provider will be doing their best to meet your needs during due diligence.  If they fail to deliver during this process will you be able to trust them once you enter an agreement?

Although it would seem like common sense, make sure to check references and ask those references questions of them about the vendor’s size, technical capabilities, and ability to respond to their needs.

It is imperative that you do your homework to ensure that your Supply Chain Management partner will respond to you.  Have a list of prepared questions.  Ask the reference to explain a time this vendor made a mistake and how they responded.  You can find out much about how a vendor will respond during a crisis.

Once you select a Supply Chain partner, you must set concentrate on deliverables.   You must have an action plan that outlines requirements, due dates and milestones.  You must continue to monitor if their words match their deeds.

Up next: Does your 3PL provider understand your business?

Would you hire a new employee without doing your due diligence? Without the interview and checking references? Well, you want a company that prides itself in its ability to execute what you both agreed upon. This is where due diligence of the current vendors is critical. Get a list of their current customers that you can contact and talk to them about their experience with the vendor you are considering. 

Do they respond well? Do they meet and exceed their customers’ needs and expectations. Understand the customers’ they will provide you will be the best they have to offer. If those contacts provide you with any cause for concern be cautious. If they provide you with great reviews then it makes choosing your supply chain fulfillment partner much easier.

Qualities of a successful outsourcing partner continued....

Creating a true partnership with another company is much easier said than done.  There are always trust factors and competing priorities.  To find a company that has your best interest at heart is tough to find, but worth the exploration.

Like every human being, organizations have their own unique personality.  All too often due diligence comes down to some sort of on-line auction.  Great way to get a good price, but how will the vendor react to your customer’s needs? Isn’t that as important as the price?

You have to find a partner that meets your needs and keeps costs low, all while being as loyal to you as you are to them. 

Business process outsourcing solutions companies should be more than a vendor, they should be a partner.

Up next: Does your partner demonstrate excellence through execution?
 

Qualities of a successful outsourcing partner continued...

It is imperative that you find a well managed company especially if they have direct contact with your customers. You want to make sure that in a crisis their sense of urgency will match your company's. It is imperative to sit down and understand in advance how issues will be escalated. A policy statement is fine as you need to know if the people responsible will react and do so in a way that mirrors your culture.

A well run company focuses on financial metrics to ensure they are in good financial condition. Talk to the management team about their philosophy about managing their business.

Up next: Your outsourcing supply chain management partner must be able to meet your needs...