With cost and time effective logistics solutions so integral to supply chain success, an increasing number of business have begun turning to enterprise resource planning (ERP) outsourcing.
But the supply chain is varied and complex, and even with this technology, not all businesses have the trained, specialized personnel to give each stage the attention it requires. Allowing one area of the chain to falter or fail can create a domino effect that will cripple the system.
Just ask Overstock.com
When the ecommerce titan rushed a transition to a new, sleek Oracle ERP before the busy 2005 shopping season, wires got crossed and some necessary connections were missed. The result? The company realized its mistake— three years after the new system went live. In 2008, Oracle was forced into an audit that revealed the ERP misstep had cost the company $12.9 million in lost revenue.
Overstock’s horror story shows just how badly things can go when you try to self-implement. Don’t be an Overstock. Using a solid 3PL team that has IT capabilities can be the difference between a well-run machine and an ERP nightmare.
Here’s how you can choose the right team to man your front line of resource planning.
Finding the Right Team
A good logistics team will have certain characteristics that will make your projects a success.
They will blend in with your existing team.Each team will be able to blend seamlessly with the members of your existing team. They will provide support to your existing team, helping your employees learn the skills that they need to make their portion of the logistics cycle operate smoothly.
They are knowledgeable in both your technology and your industry.It is critical that your outsourced team is able to integrate seamlessly into both your IT system and your current business structure and processes. A good 3PL can be IT experts AND understand the intricacies of your business or industry, well-versed in the best practices for your business’ specific needs.
They understand the expectations you have and can meet them.It is important that you identify your expectations for the ERP and your logistics system and communicate them to your 3PL so that all parties are clear on desired outcomes. This gets everyone on the same page prior to implementation. Requiring regular meetings and status reports will ensure that the project remains on budget and on track.
They are flexible and can accommodate change.Nearly all projects are subject to change once they are under way. A good 3PL team is agile, adapting to those changes and exhibiting flexibility in changed expectations and deadlines. This requires strong, solid leadership on both the side of the partnership. These leaders will guide management in evaluating personnel, identifying areas where additional training is required, and making recommendations to provide an easier, less stressful transition.
They communicate.No project will succeed without communication. Whether you are outsourcing your logistics or operating in-house, communication is the key to the entire system running smoothly. Look for 3PLs that hold communication as a vital element in their business model. They train, report and discuss to ensure that the project stays on track and all expectations are met.
They are effective at change management.An ERP is a wise investment but what good is it if it is never used? Without teams that are experts at change management, a company can stagnate and the investment is wasted because no one wanted to step up and make the change. Your 3PL should be focused not only on using your ERP, but also on ensuring that it is being used to its utmost potential. A good 3PL can take employees at any competency level and help them make the necessary adjustments to streamline their part in the chain.
Employing a good 3PL team can take a great deal of pressure off of upper management and lower level employees. The team can utilize its IT expertise in resource planning and in implementing the ERP so that the logistics system runs smoothly. This saves time, money and precious personnel resources.