The 3PL industry has changed drastically over the last 10 years.
Among the many things on the plus side, the industry continues to grow at a healthy rate and shippers today truly recognize the value 3PLs bring to their businesses.
But we need to be careful that this growth does not come at the expense of you, the customer.
With the rise in merger activity and the influx of venture capital money into the 3PL space, there is new pressure to make decisions that yield financial benefits without a corresponding customer benefit. Have you seen evidence of that?
For instance, acquisitions promote scale economies, but they can also make 3PLs slower and more bureaucratic. And that simply doesn’t jibe with the primary demands of today’s shippers for speed and flexibility.
3PL growth should come as a response to meeting market-driven needs, not Wall Street-driven needs.
Read the headlines in the logistics press and you’ll see 3PLs jockeying to be the biggest or the fastest-growing or the most popular (Vote for me!). How about we reserve a headline for 3PLs that are the best at making the customer happy? Shouldn’t that be the ultimate goal?
KANE coined a term to communicate this truly customer-centered approach to logistics services: YOUgistics.™
What is YOUgistics? Well, it’s an approach that is driven by your business strategy, where 3PL services are designed to help support your goals – for business growth, for quality, for market differentiation. A 3PL with a YOUgistics philosophy delivers the following things:
Customer advocacy is at the core of YOUgistics. That means knowing your business as well as you do and seeing things from your perspective. That deep level of understanding allows the 3PL’s associates to think and act like members of your own team. Case in point: a maker of pet food chose KANE to handle distribution to its major customers – regional pet product distributors. Logistics service levels had slipped and they wanted to raise the bar by outsourcing. Rather than learning about distributors’ concerns second hand, KANE arranged an onsite visit to each major distributor to review receiving procedures and document changes to meet distributor’ desires for receiving time, pallet configuration and other preferences. One year later, this manufacturer was named Supplier of the Year by the Pet Industry Distributors Association.
A customer-centric 3PL doesn’t try to fit your challenge into a one-size-fits-all logistics solution. It invests the time required to diagnose the problem and design a custom solution to meet your unique business objectives. Case in point: For a large wine and spirits distributor, KANE handles direct delivery to 200+ stores. Each store has a different set up for receiving deliveries, from loading docks to a door adjacent to a crowded parking lot. No single trailer type – barn door, roll door or side door – provided a universal solution. So KANE’s operations and transportation team visited every single store location to document the delivery requirements of each and then designed routes to satisfy both delivery speed and trailer type.
Flexible Operating Model
There’s no doubt that maximum operational efficiency is achieved when volumes and logistics requirements are predictable and 3PLs can develop a plan that they can set and forget. But that’s not reality. Your business changes all the time so 3PLs must provide flexible space and labor solutions that can scale with you. Case in point: A candy manufacturer’s largest retail customer informed them of a requirement for label change right before the rollout of a nationwide store promotion – after product had already been staged for shipment. Mislabeled deliveries would incur a fine. KANE declared an “all hands-on deck” for the entire weekend, bringing in workers from all departments to re-label tens of thousands of boxes in two days. The requirement was met. No fines were issued.
3PLs typically measure dozens, even hundreds of metrics, but there’s really one metric that matters in the end: Customer Happiness. The mother of all metrics. Think about it, what shipper is going to be happy if the warehouse is shipping out the wrong orders or if inventory counts are way off or if their 3PL contact takes a day to respond to a critical question? Customer happiness embraces every other metric, and that’s why 3PLs need to embrace this success measure in a more formal way.
Said the director of operations for a mid-sized beverage company: “Until we started using KANE, I had no idea that a 3PL could run so smoothly. They are hands-down the best 3PL in the business. They have exceeded all my expectations of efficiency, communication, and professionalism. When I have any issues, the KANE team comes to the rescue.”
Now THAT’S happy.
At KANE, our most critical metric is our Net Promoter Score (NPS). We’re somewhat obsessive about it because it supports our central belief about our own success – that if customers are happy, they’ll stay with us and grow with us.
YOUgistics: Keeping it Simple
In a supply chain era where robots pick and deliver products and trucks drive themselves, there’s a slightly less sexy idea that 3PLs need to embrace: put the customer first. That’s what YOUgistics is all about.
Pretty simple, really.
KANE and its associates seek to be the embodiment of this philosophy, where the focus is on helping your business achieve even the boldest vision of itself and instilling in you the confidence that your logistics partner will make it happen.