SHIPPERS INTERVIEW Europe
provider list. We put some providers on the list and the 4pl will add others – that’s a system born out of practicality, sometimes out of economical sense,” Hofstee said. He went on: “Cisco keeps close to
Frank Hofstee
money we can afford”
“We use the best we can find for the
the transport and logistics community. This is an open, level playing field with multiple vendors, suppliers and partners where we out-task a lot and many suppliers are allowed to have their workplace on a Cisco campus close to the decision-making units. This way they become part of the culture and stay close enough to pre- empt their business development to meet the daily challenges at Cisco. Once they have reached this status they have effectively become part of the preferred supplier list,” he observed. “The scope of the preferred supplier list and the role each supplier has in this is regularly reviewed by a managed process and it is quite normal for it to get refreshed with new suppliers every now and then. “We leave the choice of the air
freight carrier to the forwarder,” Hofstee said. Whether the 3pl chooses to move the cargo on British Airways or Lufthansa is not of day-to-day concern to his department “as long as it doesn’t disrupt the supply chain”. But he is clear on the general direction of the path that must be followed: “Of course, they are not allowed to ship on the ‘Boogie Woogie Express’ type of
airline and must use quality carriers. They are also not allowed to use airports that have a known problem with security or with Customs. These are all areas that can become a disruptive issue with the supply chain, which we can’t afford.”
Calculating cost Cost is always a factor in the way Hofstee and his team oversee the workflow. “We use the best we can find for the money we can afford, but we do nevertheless keep a close eye on ‘total cost of ownership’. If I have a shipment from China to Europe that I need in five days and the airline can ship from Hong Kong to Amsterdam or Shanghai to Luxembourg in three days then I would allow the 3pl to hold the freight at the departure point for one day so that they can consolidate at a better price … and Cisco therefore gets the best price. “The 4pl is given our end-to-end
service level agreement to work with, so it owns the risk to make up time in a later stage of the flow when time was lost in the earlier part. We also agree to share the gain when we recognise overachievement.” Cisco sees ‘total cost of ownership’
as an end-to-end marriage of speed, reliability and quality balanced against cost, Hofstee agreed. “We challenge our suppliers to meet us on equal terms, but not all constraints are that
8 AIR LOGISTICS MANAGEMENT
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