SUPPLY CHAIN
After building up a true relationship, with respect for the people and knowledge of others capabilities, we can move forward to guarantee that sensible topics, like cold-chain distribution processes, are properly managed by our counterpart.
Some products are noticeable damaged under improper transport conditions, others aren't. Only an open honest dialogue will guarantee that our customers receives adequate product.
As a matter of fact, to effectively manage your temperature-controlled logistics through an improved external relationship management, some steps might be considered. First, one must be sure to have a strong Customer Relationship Management - CRM - equivalent implemented for formal governance and in this sense a Vendor Managed Inventory-VMI - process would even improve this control. My first VMI, established in late 1996, was managed by my chemicals’ transport company. But please also take into account that a solid Sales and Operations Plan Process permits a feasible delivery route through the use of planned dispatches, with transit times within 48 hours for most customers. And one question here: have you ever wondered about bringing your 3PL to your companies’ S&OP? If not, why? Have you ever thought how committed they’d be upon joining you into this process? The open-hearted talk obtained through this relationship model guarantees full support to quality, and avoids unnecessary risks taken by the 3PL.
In order to get a strong and respectable connection one simple point is needed: you must like the other part, and to like it you must know your counterpart. It’s surprising, from a professional perspective, how you must go deeper into their process, be familiar with their hardware and equipment, and feel relaxed when walking through their warehouses to become more and more like feeling at home. After better knowing your partner’s company and their potential, you’ll be feeling comfortable enough to start teaching them what you want.
I remember a situation when I was hired to work in a Danish pharmaceutical company. They had moved between different 3PLs in a short time. Service level was nothing but terrible and we were losing market share due to poor On Time in Full-OTIF - rates. Thus, the Director’s Board was considering moving back to one previous partner. As the new Logistics Manager, I was then asked about what to do and my very first comments were “Did anyone tell this new partner what we expect from them? Do they know our process in detail? Do we know their bottlenecks? If we move back to previous suppliers, we’ll lose our negotiation advantage”. As a matter of fact, no one was very sure which path we should take. It was then decided to keep the current supplier and get deeply involved in their operation. So I did, and OTIF numbers rose from 41% to 94% in just about three months.
This is just to reinforce that when you like and know your partner, you can easily teach the way you want things done and can pick the low hanging fruit in a short period.
Each vendor, partner, CMO or 3PL has its unique and special features that must be known. Our role while on external managerial functions is to help them to develop into precious stones. Part of their commitment with us starts when they realize we do not want just positive audit results, but a joint-growing process. To help in this evolution process sometimes we must advocate for these partners by finding shortcuts or alternative answers in our own companies since only we know how complex big contractors like ours are. A continuous discussion and a true help in developing our partners, managing them with transparency and honesty while keeping our contractor’s hat will be perceived with true respect for business continuity. And we must remember that in certain moments we will drift from B2B to people-to- people relationships, and for these times a mutual respect is the driver for all further actions.
I do believe that the main steps to success in this journey can be easily achieved through use of simple steps such as:
• Maintain an inter-dependent team with shared goals and honest cooperation between both companies. A committed and willing to compromise group is born when common targets are set.
• Obsession for Performance. Both sides must be set for a never- ending chase for Quality, Service, Technology, Cost, No Waste...
• Bear in mind that you might be building up a robust long term P2P relationship, rather than only contract-managed discussions. Today I have former contractors in my Facebook page! Companies may even fade away, but the relations you build will last much longer.
• Celebrate. Take some time to celebrate your achievements. Invite your 3PL partner for a lunch – and not the contrary, as we used to see.
Relationship management is an exercise of patience and tolerance - internal and external to your company, but when properly done I guarantee you will build up MASSIVELY STRONG bonds that can positively reflect in your daily challenges. I hope you do get such gigantic connections as strong as the giant we met earlier in this article.
References 1.
https://en.wikipedia.org/wiki/Governance
Luiz Alberto Barberini is an MBA, mechanical engineer, CQE and is APICS CPIM certified, with three post-graduation degrees. He has worked for more than 25 years in activities related to Supply Chain, Procurement and Logistics, and for few years had coordinated the dangerous goods transport committee at ABIQUIM – Brazilian Chemical Industries Association. Ford
Motors Co., Rhône-Poulenc, British American Tobacco, Pfizer Laboratories, Takeda Pharmaceutical and Merck, Sharp & Dohme are some companies where he worked and contributed adding value with his knowledge and experience. Barberini currently works as Operations Manager for Latin America External Manufaturing Operations - Consumer Care at Bayer and teaches Negotiation, Demand Management and Quality in Logistics for some major post graduation schools in São Paulo – Brazil.
Pharmaceutical Outsourcing | 38 | July/August 2016
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