Cheapest Is Not Always Best

Are you in the market for a third party logistics (3PL) provider for your distribution needs? What product and service attributes are you using as the basis of your decision? If the basis is simply cost, then you might consider a more comprehensive view of possible decision criteria.

3PLs have been under increasing pressure to reduce costs due to broader economic factors, increased competition, and perceived commodization of the 3PL market within the last few years. The issue of commodization stems from an increase in 3PL providers although not all 3PLs are alike when it comes to their products and services. The question is how might you as a 3PL customer choose a provider and what capabilities should be taken into consideration.

Of course price, service performance, and flexibility are important, with some customers considering these factors as being “entrance ticket” capabilities to serious consideration. Other standard factors include systems and technology capabilities, geographic coverage, global reach, asset or non-asset approaches, client references, and experience in the client’s specific industry. Still other consideration might be given to areas such as how the 3PL has added value to their client references, has the 3PL championed process improvements yielding savings or new revenue streams for the client, or perhaps the 3PL offers services such as network analysis, liquidation, recycling, specialized packaging capabilities, or other unique added-value services.

If you’re using cost as the primary basis of decision making for 3PLs then you may be missing huge opportunities to improve predictability, reliability and sustainability in your logistics distribution programs. Certainly if your logistics and distribution processes are straight-forward, low in complexity, and serving a limited geographic market then perhaps some of the low-cost providers may be the best answer. For those with moderate-high complexity, geographically diverse and/or global markets, and considerable budgetary risk, the answer is to take price into consideration but to do so as just one factor or many to consider.

The consultants at ASIL, Inc. are Logistics and Supply Chain professionals with over 100 years experience in various Supply Chain roles. We are adept at developing partner assessments. We help to determine your client's needs and then weigh, identify, and assess a partner’s capabilities in order to find you the best solution for your business opportunity. We have a proven track record of impactful solutions and welcome the opportunity to serve you and your clients. Call us today and let us help you realize new areas of profitability and success.

Contributed by Warren White

ASIL Receives "Best of Santa Clara" Award
* * Second Consecutive Year * *

WASHINGTON D.C., - Advanced Solutions In Logistics, Inc. has been selected for the 2009 Best of Santa Clara Award in the Business Management Consultants category by the U.S. Local Business Association (USLBA). This is the second consecutive year that ASIL, Inc. has been recognized for it's outstanding achievements.

The USBLA "Best of Local Business" Award Program recognizes outstanding local businesses throughout the country. Each year, the USBLA identifies companies they believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and community.

Michael Singleton, Vice President of Operations, accepted the award on behalf of ASIL, Inc. saying "We are honored to be recognized again for our accomplishments in the Business Consulting arena." Four years earlier, the ASIL, Inc. team received the 'Keeping America Strong' award.

The USBLA Award program is focused on quality. Winners are determined based on the information gathered both internally by the USBLA and data provided by third parties.

Contributed by ASIL Marketing

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Start-ups / Hick-ups

Every day there are 1000’s of new companies starting up. Deciding to go into business is no small feat. Whether it is because you believe you have a better mouse trap, or because you have decided that you want to be the boss, or whatever. The promise of riches at the end of the rainbow certainly has an appeal, especially if you can to do it your own way. Here is the catch. Good people, good ideas, cash, and a desire to succeed are not enough to make it. This is typically tested during the early stages of a start-up.

A challenge we all face is that human nature is one of the greatest killers of new ideas and even new companies. Placing your faith and trust into a smaller group, that appears to be aligned can be exciting and all consuming. The outcome is that 8 out of 10 fail in the first year. Part of the problem is trying to play too many key roles. The roles of a board member, shareholder, and employee each have a unique focus and purpose to fulfill. Sadly, people in all three roles have a tendency to lose perspective about the uniqueness of each role.

Board members must look to the future and ensure that the overall current structure is aligned to deliver. They provide guidance and support to the CEO and represent the interests of the shareholders. Shareholders have a vested stake in the outcome of the business through their ownership of the company. Their mechanism to seek change is through the Board. They can also vote with their shares and choose to sell. Employees are tasked with delivering the results. Each may wear many hats in the beginning, and therefore requiring the confidence and trust that everyone is doing what is agreed upon. Some may even suggest we don’t need a leader, we will all be leaders.

So what is the big deal? Employees need leadership. There must be a leader that is accountable to the Board. In absence of a leader, the employees operate like a collective of individuals. The situation is exacerbated when an individual plays all three roles as this sets the stage for unethical behavior. The phrase ‘Cash is King’ is right on target, especially when you have an employee in all three roles and they administer the cash. They can chose to ignore the Board (because they are part of the Board), they can view themselves as acting in the best interest of the shareholders (of which they are one) and finally as an employee that has access to the money they can write the checks or take the actions they want. Clearly this example is an extreme, but it is also a real example.

Many start-ups crash not because of a bad idea or premise, rather because of a lack of leadership and the unwillingness to work as a team. No question that money is a fundamental ingredient like air or water. Having it is essential. Some may even believe that if you get more money then everything will be OK. Actually the contrary is true. Having operating funds will not make up for the lack of ethics, trust, or respect.

The professionals at ASIL, Inc. are skilled in the challenges of start-ups. We believe it is essential to have clarity of leadership and definition of direction. Give us a call to accelerate your start-up’s success.

Contributed by Peter Pazmany