Outsourcing warehousing and logistics activities is nothing new. But as third parties take on more inventory management responsibilities that are critical to customer satisfaction, they require more oversight.
Managing such relationships is not much different from managing the people and teams who work for you directly.
Putting aside business goals for a moment, as a manager there are two kinds of people who work for you. Exactly who falls into which category may change a little from day to day but mostly there are those who makeyour life easier and those who make it more difficult.
Not surprisingly, the people who make your life easier exhibit many of the hoped for qualities listed in "help wanted" ads. They show up when and where they're supposed to be. They take initiative and offer solutions to problems as they occur. Not only do they deliver on their promises, they strive to exceed expectations. They don't complain—at least not very often—and they don't create extra work for you.
You know the folks who make your life more difficult and why. Management gurus will tell you that you have to get such people "off the bus." They may get the job done to a degree, but in the long run will not help your department, your facility or your company move forward and accomplish its goals.
Likewise, there are business relationships that make your job easier and there are those that make it more difficult. Whether it's a part supplier or a third-party logistics provider, some will offer solutions to the inevitable problems as they arise. They will meet deadlines, execute against clearly stated objectives, and look for opportunities to deliver additional value (See "Value Proposition," page 20).
Then there are those that you would love to get rid of. But just as some people are more difficult to fire than others, it's not always that easy to sever some business relationships. Equipment or service contracts signed at the corporate office may override specific needs at the business unit level. Or, for a small or mid-size manufacturer, a critical component may be supplied by a much larger company that has bigger customers to worry about. Sometimes, depending upon where you stand in the management hierarchy, you simply won't have the authority or leverage to jettison a difficult business partner.
Of course as employees we each fall into the "difficult" or "easy to work with" category as well. More than any other aspect of our jobs, we have direct control over which category that is. In challenging situations, when stress levels are high, you want to be one of the people who figures out a way to get things done, with a smile if at all possible. When your boss moves up, he or she will often bring along those who have made them successful.
The same holds true for your business partners. As your supplier's customer or your customer's supplier, being easy to work with will mitigate some of the problems of a lessthan-perfect relationship. With regard to contract service providers, for example, people and organizations that are easy to do business with will get extra support when issues pop up, and they are less likely to be neglected during the next capacity crunch.