In this first in a new series, Paul Parry, Vice President, Global LLP at DHL Supply Chain, explains how an LLP can transform your business’s supply chain
In this new series, I’ll seek to demystify the role of a lead-logistics provider (LLP), and explain how its various components can help your business thrive in turbulent times.
First, I’ll look at how supply chain design can unlock your business’s potential, and how supply chain management services can help your ideas gain traction. Part two will look at operations: how the ‘control tower’ can deliver real results, and how an LLP helps to continually improve your business. Finally, I’ll examine the LLP as an agent for change and supply chain transformation.
Traditional, in-house solutions are no longer the best way to develop a supply chain that can respond to changing customer demands while also coping with economic uncertainty and strong market competition. If you want to transform your supply chain’s performance and gain a competitive edge over your rivals, consider instead developing a strategic partnership with a world-class LLP.
Journey to transformation
If you want to transform your supply chain, you must first determine and validate the strategic goals and vision of your wider business. An LLP will then work with your team to understand these goals, and develop a supply chain strategy that is relevant for your company now, and in the future.
An LLP can then use its real-world experience and optimization tools to make this vision a reality. It can develop an optimal end-to-end supply chain that encompasses inbound-to-manufacturing and in-plant logistics; finished product distribution and aftermarket care; and maintenance, repair and operations (MRO).
The design for an integrated supply chain will provide a solid platform to support your business’s goals. It should not only consider optimal transportation networks and modes, but also clarify the role of facilities, such as warehouse cross-docking, and value-added services such as postponement.
The value of on-call expertise
An LLP’s involvement in supply chain design doesn’t end when the initial ideas are implemented. The LLP is a constant presence, one that’s firmly embedded in your business. It should understand the shifting demands on your supply chain, review what’s working – and what isn’t – and continually improve material flows and efficiency levels.
The LLP’s expertise – with its core competencies in supply chains and logistics – combined with the client’s knowledge of its own supply chain and wider business requirements, creates a powerful partnership. Under this arrangement, the LLP’s knowledge can be deployed by the customer whenever and wherever necessary to improve operations.
Because LLPs such as DHL Supply Chain work with customers in various sectors across the world, their knowledge and understanding of supply chains is enhanced all the time, and they are able to develop new ideas inspired by best-practice case studies.
Finding the right expert in an in-house supply chain organization – one that can support specific challenges – is a common difficulty as global supply chains become longer and more complex. In contrast, an LLP can deploy its subject-matter experts to support your specific requirements. This ensures that, when a certain area of the supply chain is reviewed, the company can call on the right support at the right time. This enables your company to broaden its expert knowledge in a very flexible way and satisfy the needs of tomorrow’s supply chains.
Financially sustainable design intelligence
The ability to work with an LLP and make use of its expertise every day does comes at a cost. But the significant – and ongoing – financial savings and operational efficiencies that are generated usually offset this management fee. Although additional resources may be employed at the overall strategic level, this spend is balanced by significant net savings across the supply chain.
Leading organizations in many sectors have been using the LLP model in a cost-effective way for a number of years. Car manufacturer Ford, for instance, uses the set-up to design, manage and coordinate its European inbound supply chain. The strategy has regularly delivered significant cost savings during its 15-year duration.
British American Tobacco (BAT) has deployed the model to good effect allowing it to provide a fully integrated, cross border solution. The partnership has led to improved control and visibility of the supply chain that in turn has reduced costs and the environmental footprint while supporting growth. Luxury automotive manufacturer Jaguar Land Rover, and construction machinery maker JCB are also enjoying the substantial benefits of using an LLP.
Turning ideas into reality
One of the core benefits of working with an LLP is its ability to translate your aims into real-world success. It can manage all stakeholders in your supply chain – from suppliers to logistics service providers – as well as offering ‘value-added’ services such as customs advice, supply chain risk management, and freight billing and auditing. An LLP makes its best-in-class end-to-end supply chain management services an integral part of your organization: with a ‘one team, one set of goals’ attitude, it’s strategy is totally aligned with yours. If a fully managed service isn’t appropriate for your business, an LLP can provide one or a combination of these services instead, enhancing your supply chain resource without outsourcing it entirely.
DHL Supply Chain, for example, offers a fully integrated logistics procurement service, where we analyze a company’s needs and source the appropriate network or logistics service providers. The procurement process is entirely neutral: we invite tenders, evaluate bids and get the best deal for the customer. The whole LLP arrangement is about doing whatever is necessary to improve the customer’s bottom line, maintain service levels and deliver the best result.
In the next article in this series, I’ll examine how an LLP can build on its redesign of your supply chain and can help your company run and improve its day-to-day operations.