By Mike Schoenfeld
Every globally recognized company has inherently different supply chain management and third-party logistics (3PL) needs. What may work for a domestic company that ships to domestic partners and warehouses doesn't automatically work for companies shipping worldwide. So how can a domestic-based 3PL provide the necessary solutions for a global client?
The fact is that domestic consumer electronics and computer retail and service industries provide excellent examples of how internationally known brands operate within a global supply chain. Appliance, electronics and computer retail giants such as Best Buy and Sears, or manufacturers like Xerox and Black & Decker, utilize a domestic company to fill their international outsourcing needs.
This article will make the case that, by better utilizing available technology, business relationships and incorporating some creativity into a plan, domestic 3PLs can provide the same quality of service and management that internationally located 3PLs provide to their global clients.
Technology has come a long way from the telegraph and, more recently, the fax machine. Global business operates at lightning-fast speed, and 3PLs, regardless of location, have to communicate as effectively as — if not better than — every Fortune 500 and major worldwide corporation out there. With completely connected systems, a good 3PL has the ability to manage client databases and provide up-to-date reporting, as well as handle and provide electronic order processing, vendor drop ship orders, forecasting, warehouse logistics, reverse logistics, freight forwarding, transportation, emergency orders, global sourcing, parts standardization, credit collections, and the management of inventory and vendors.
Companies like those noted above and many of their competitors have enlisted the help of domestic 3PLs to procure inventory from both their own manufacturers and other outside vendors, as well as original equipment manufacturers (OEMs) worldwide. In most cases, 3PLs have had to acquire or develop unique technologies to electronically communicate with multiple global sources for product and parts, shop the resulting orders for best price, procure the item and then manage the entire order–to-cash cycle. The result is the right item being on the store shelf or the right part getting delivered to the appropriate service tech at the right time and at the right price.
Additionally, the technologies now available allow 3PLs to provide better service to clients whether they are domestic or international. A completely connected supply chain means companies like Best Buy and Xerox don't miss a beat when a hurricane strikes the Gulf Coast or workers at any given facility go on strike. With around-the-clock communication with partners worldwide, 3PLs are able to develop contingency plans for clients when they are needed, and, moreover, the client's customers don't see any interruption in the availability of the products and goods they need. For example, the threat of a longshoreman strike in one of California's major ports once threatened the availability of goods domestically. Understanding this threat and utilizing the available technology allowed for the instant diversion of goods to ports in other states and Canada.
Each day, 3PL providers for major retailers like Best Buy make shipments to company-owned service centers, national accounts, retailers and end users worldwide. That's a lot of destinations for different goods in various quantities to be sent. Domestic 3PLs can provide such high-demand clients as Best Buy the solutions necessary to properly function in their day-to-day business — meaning the 3PL doesn't have to be located in Shanghai to make sure a shipment leaves Malaysia on schedule, and doesn't have to be in San Diego when the shipment arrives.