Third-party logistics service provider is an independent economic entity, has a reliable logistics network and information system, the logistics operation of the whole management and control, has a high efficiency of the logistics specialization capabilities for external customers to provide warehousing management, transportation management, and value-added logistics services, can create value for the customer to improve the operational efficiency and customer service, and to enhance the customer's core competitiveness of the enterprise. Enhance the core competitiveness of the customer's enterprise. When choosing a 3PL service provider, industrial and commercial enterprises expect cost savings, improved production capacity, higher operational efficiency and better customer service. In the process of procuring third-party logistics services, enterprises are able to reduce transaction costs in the outsourcing process and enhance the level of standardization and credibility of service procurement according to the standardized procurement process, so as to select the appropriate third-party logistics service provider.
2. Third-party logistics service procurement process
The five steps of the third-party logistics service procurement process are: defining logistics service needs; developing a logistics demand proposal; selecting a provider; implementing third-party logistics services; and managing the relationship and performance evaluation.
2. 1 Defining Logistics Service Requirements
Clearly defining the scope and requirements of the procured services is a prerequisite for the successful operation of third-party logistics service procurement. The definition of service requirements mainly includes the following four aspects:
(1) Functional description definition. Definition of the service functions to be procured, such as transportation, warehousing or value-added services.
(2) Activity description definition. Define the third-party logistics service supply process, that is, how to provide services.
(3) Service level definition. Define the logistics service level, such as the consistency of delivery, order lead time, cargo loss and cargo difference.
(4) capacity definition. Based on the enterprise logistics needs to determine the service capacity of the provider, that is, whether the third-party logistics enterprises have the ability to provide transportation, warehousing and value-added services to meet the logistics needs of enterprises [3].
Through the definition of service demand, enterprises in the selection of providers more targeted. Because logistics services involve the company's procurement, production, marketing and many other departments, there is a cross-functional, so in the definition of demand, the company needs to be involved in all relevant departments *** with the support of the senior leadership of the enterprise, the formation of members of the various departments to participate in the procurement decision-making team.
2.2 Formulation of Logistics Requirements Proposal
The enterprise puts forward the objectives to be achieved by purchasing the third-party logistics service, such as performance objectives and cost objectives. According to the objectives, set up the criteria for selecting the third-party logistics service provider, including price, response time, operational management structure, effectiveness of senior management, quality protection system, information technology system, financial stability, response to unforeseen circumstances, and so on. Through the development of criteria, so as to establish the scope of third-party logistics service providers suitable for enterprises, generally can be set to Top10, that is, suitable for the enterprise's top 10 service providers, but also according to the actual situation to increase or reduce the number of providers to choose from.
Based on the defined service needs, established goals and selection criteria, the development of logistics requirements proposal (Request for proposal, RFP). The RFP is a document that describes in detail an organization's logistics service needs and communicates those needs to service providers to solicit solutions, and ultimately becomes part of the logistics service contract, allowing each provider to have a complete picture of the buyer's needs. Logistics demand proposal generally includes a basic introduction to the enterprise, such as organizational structure, customer information transfer needs, project description, product flow, transaction information, and computer system information; also includes the enterprise's demand for logistics services requirements, such as warehouse location, transport routes, transport scale.
2.3 Selection of Providers
Survey and research the top 10 service providers suitable for the enterprise, to understand the provider's expertise and characteristics, focusing on the investigation of the following four aspects: ① third-party logistics companies have similar values and objectives of the enterprise; ② whether it has a timely update of the information technology system; ③ whether it has a stable and reliable core management; ④ whether it has a long-term cooperative relationship **** agreed to be willing to establish Whether the third-party logistics enterprise has similar values and goals as the enterprise; ② whether it has a timely updated information technology system; ③ whether it has a stable and reliable core management; ④ whether it has a willingness to establish a long-term cooperative relationship Among them, the proximity of the corporate culture and management philosophy of both partners is particularly important in the selection of logistics providers, as similar corporate culture and management philosophy are conducive to the communication and learning between both partners and the improvement of organizational skills and operation level. Further screening of providers through open bidding and interactive selection, narrowing the target to 2-3, the enterprise will be submitted to the logistics requirements proposal to these providers, and require each provider to submit logistics solutions; in the comparison of logistics solutions based on the most appropriate third-party logistics service providers.
Since third-party logistics involves a considerable degree of operational risk for both the purchaser and the provider, in order to protect their respective interests and reduce risk, the two sides must carefully negotiate the rights and obligations in the process of cooperation, describe in detail the service projects, service levels, compensation, organization and process, such as performance targets, incentives and penalties, as well as the risk-sharing method, etc., to reach an agreement on a service contract that is advantageous to both parties.
2.4 Contract execution and control
During the service implementation process, the enterprise and the provider should jointly supervise and verify the execution of the contract, and the provider should provide timely feedback on the problems in the service implementation process. If the original contract terms need to be revised due to the impact of some unanticipated factors, such as revising the warehouse layout, change the delivery date, etc., the two sides should still be fully communicated, collaborate to solve the problem, remove the unfavorable factors, otherwise, in the view of the procurement side of the change may not matter to the provider may bring about a great loss; similarly, the provider to change the requirements of the procurement side of the procurement side will also face great difficulties. Communication in the implementation can become a link between the procurement enterprise and the service provider, expanding the contact surface between the two sides, to promote cooperation between the two sides.
2.5 Relationship management and performance evaluation
Enterprises applying third-party logistics services to reduce the workload of the enterprise's logistics workload, but the enterprise still needs to carefully monitor the provider's work to ensure that timely detection and resolution of problems, and the establishment of a communication mechanism to *** enjoy information, ensure the stability of the service, improve the reliability of the service and the quality of the service, and reduce the cost of operation, so that the continuous improvement process of logistics can be reached, and both parties to the service provider to improve the quality of the service, to ensure the stability of the service. The continuous improvement process of logistics can be reached and the relationship between the two parties can be strengthened. In relationship management, the establishment of team-based joint task force is an effective management method. Between the enterprise and the provider of frequent exchanges and communication on cost, operational planning, quality control information, the two sides of the relevant personnel **** with the discussion to solve the supply process encountered in the various problems, the establishment of a good atmosphere of cooperation, increase system flexibility and resilience, maintenance and improvement of the relationship between the two sides.
Enterprises should set up a performance evaluation system to assess the performance of third-party logistics service providers. The performance evaluation system generally consists of two parts: qualitative assessment and quantitative assessment. Qualitative assessment mainly includes service reliability, timeliness, convenience, order interval, flexibility, financial stability, etc.; quantitative assessment mainly includes service price, response time, etc. [2]. Enterprises develop procedural, standardized and regulated provider evaluation standards, multi-level, multi-channel and all-round performance evaluation of providers, to provide a basis for the realization of provider performance evaluation and incentives. Through the evaluation, if the third-party logistics service provider not only meets the needs of the enterprise well, continuously improves the service quality and operational efficiency, but also realizes close cooperation with the enterprise and becomes an inseparable part of the enterprise's operation, the enterprise may consider establishing a long-term partnership with it. Otherwise, after the expiration of the contract period after communication can consider whether to change the partner.
3. Example Analysis
Procter & Gamble (P&G) is the world's largest producer of consumer goods, and in 1992, P&G entered the Chinese market and set up a large-scale production base in Guangdong. For P&G, which has just entered the Chinese market, whether the products can be transported to all parts of the country in a timely and fast manner is an important part of whether it can seize the Chinese market quickly. In order to save transportation costs, P&G seeks railroad solutions in addition to road transportation, with transportation logistics service needs.
As a manufacturer of daily-use products, P&G's logistics service demand has high requirements for response time, service reliability and quality protection system. According to the logistics service demand and service requirements, there are two main types of logistics enterprises entering P&G's field of vision: state-owned enterprises and private storage and transportation enterprises occupying the dominant position in the logistics industry. After investigation and evaluation, P&G thought that the state-owned logistics enterprises had single business at that time, either they only managed warehouse storage or were only responsible for contacting railroad transportation, and they had backward equipment in storage warehouses, imperfect quality protection system, backward information technology in transportation, lack of service consciousness of the staff, and the response time and service reliability could not be guaranteed. Thus, P&G casts its eyes on private storage and transportation enterprises. When screening the third party logistics enterprises, P&G found that P&G contracted the railroad freight forwarding station to provide "door-to-door" service with the business characteristics of "quality first, customer first, 24-hour service". Therefore, P&G submitted the proposal of logistics demand to POSCO, and made a tentative investigation on POSCO's logistics capability and service level. Focusing on P&G's logistics demand, BaoSupply designed business process and development direction, formulated strict process management system, and "took good care of" P&G's products, which met P&G's requirement. Meanwhile, BaoSupply's desire for long-term good cooperation and serious and responsible cooperation attitude were welcomed by P&G, which made BaoSupply P&G finally chose POSH. P&G finally chose BaoSupply as its partner, and the two sides signed the general agent contract of railroad transportation and started the formal cooperation.
In the process of implementing the third party logistics service, Baosupply establishes a nationwide logistics operation network for P&G's logistics service demand, provides value-added service for P&G in the whole process, ensures that the goods are operated in accordance with the same operation methods, modes and standards in the process of transportation, and picks up the cargoes by the employees of Baosupply Storage and Transportation who have received the special unified training after the cargoes have been transported to the destinations, After the goods are delivered to the destination, the employees of P&G Storage & Transportation who have been specially trained in unified training will pick up, unload and transport the goods to provide door-to-door "one-stop" service for P&G and deliver the products of P&G to the sales outlets all over the country in a fast, accurate and timely manner in accordance with strict GMP quality management standards and SOP operation and management procedures. The initial cooperation between the two sides has achieved quite good results, POSCO has helped P&G to save cost up to 6 million dollars in one year, and P&G's demand for high quality and high standard of logistics service has also greatly improved POSCO's service level.
With the growth of P&G's business in China, the demand for warehouse storage has increased dramatically. POSCO's good operational performance has been recognized by P&G, which has further outsourced its warehousing business to POSCO. In response to P&G's logistics needs, POSCO plans, designs and implements logistics management system, optimizes business processes, integrates logistics supply chain, meets P&G's individual needs in the mode of "tailor-made, integrated operation, personalized service", improves logistics reliability and reduces total logistics costs. Driven by the partnership between the two parties, P&G establishes a high-level information technology system to help manage and provide a comprehensive and effective information platform, realizes real-time online tracking of key logistics information such as warehousing, transportation, etc., and realizes seamless connection with P&G's electronic data, so as to make P&G and P&G's operation process and information effectively integrated, thus making the logistics more efficient, rationalized, and systematized. The strict and high-quality logistics service of BaoSupply greatly reduces the logistics cost of P&G, shortens the order cycle and transportation time, and improves the customer service level of P&G; and P&G has prompted BaoSupply to continuously improve its logistics service level, and become a leading third-party logistics enterprise in China today.
Procter & Gamble chose POSCO as the third party logistics service provider for its own needs and carried out a partnership, and realized the goal of "win-win" under this cooperation mode. Under the growing demand of logistics market and the fierce international and domestic market competition, the success of P&G's application of third-party logistics will set a benchmark for Chinese industrial and commercial enterprises to purchase third-party logistics services and choose logistics service providers.
4. Conclusion
Third-party logistics enterprises can reduce logistics costs, shorten order cycle and transportation time, and improve customer responsiveness; they can also create value for customers. Business enterprises choose the right third-party logistics service provider, first need to accurately define their own logistics needs, and then choose the provider that can meet the needs and goals of the enterprise, and finally the relationship management and performance evaluation of the provider. Enterprises applying third-party logistics can significantly reduce total logistics costs while improving service performance. Source: /u/4b9a9d370100083o