10 Steps to Successfully Integrating a Materials and Logistics Services Provider into Your Operation
Maintaining onsite control of inventory management is critical for countless organizations, many of which do not specialize in warehousing and inventory management. These companies often look to partner with an integrated materials and logistics services provider.
The goal is to improve essential business activities by implementing warehouse and distribution best practices while leveraging their partner’s expertise in business integration. This model allows an enterprise to focus on its core business while benefiting from a comprehensive, efficient, and hassle-free integrated logistics solution.
If this is the year that your company decides to work with a materials and logistics services provider, here is exactly what you can expect from the time you select a partner right straight through to the long-term relationship that you establish with your provider.
Supply chain organizations are under immense pressure to perform right now. Always a vital element in a product-centric company’s operations, supply chains are more critical than ever with changing customer preferences, an ongoing e-commerce boom, supply shortages, and rising transportation costs all keeping logistics managers up at night.
Underlying these challenges is a global pandemic that’s had sweeping, negative impacts on the world’s supply chains. In the midst of all of this, companies are scrambling to keep up with demand while at the same time staying efficient, effective, and profitable.
For many, the solution to these and other challenges is to outsource non-core responsibilities to a reliable, reputable partner. A company that specializes in making medical equipment, for instance, will work with a materials and logistics management services provider that offers an integrated suite of solutions spanning key areas like labor management, order fulfillment, shipping/receiving, inventory optimization, facility design, technology usage, and logistics.
By taking these and other non-core responsibilities off a company’s plate and putting them squarely on their own shoulders, materials and logistics services providers like Canon Business Process Services help firms optimize their warehouse and distribution center operations to work better, smarter, and faster in any business conditions.
The question is, once you decide to outsource these activities, how do you find the right partner, set up the relationship, and get the most out of it? In this report, we reveal the top 10 steps that all companies should take while on this journey and highlight the three stages of successful alignment with a materials and logistics services provider.
Strengthening Your Supply Chain
Soon after making that first contact with one or more materials and logistics services providers, they should be trying get a feel for what you are looking for, understand your business operations, and solve your pain points. They should also ask questions about your facility (e.g., is it a new facility? If not, how long has it been established? And if it’s aging, is it ready for an expansion or upgrade?), and your future plans for that space.
From there, the partner should provide warehouse and logistics subject matter expertise focused on optimizing and fine-tuning your operations. An approach focused on integrating into your facility, culture, and existing processes, differentiates the more tailored, flexible approach of an integrated materials and logistics services provider from a typical offsite third-party logistics firm (3PL), which is more fixed in its operational approach.
“We go in and collect relevant data, review the customer’s processes, and really get a good feel for what it’s looking to accomplish,” says Jeremy Wisdom, senior solutions consultant, warehouse and distribution at Canon. “From there, we can begin to present solutions and ideas.”
Stage One: Assessment and Planning
Once a contract has been put in place, the assessment and planning stage kicks into gear as your materials and logistics services provider develops an implementation plan and fine-tunes it according to your company’s individual requirements. During this phase, the partner should:
1. Thoroughly review your current operational metrics and service level agreements (SLAs). Your provider will want to know if there is an existing baseline in place for metrics, key performance indicators (KPIs), and service level agreements (SLAs). If there isn’t, then it will work to establish these important bench-marks, always ensuring that they align with your organizational goals and targets (e.g., maximize existing warehouse space, build a new facility, acquire more automated equipment, improve throughput, lower employee turnover, etc.).
“The right provider will be experienced with a large variety of warehouse management systems (WMS’s) and have expertise locating and extracting hard to find data from those systems,” says Wisdom. “Then, the provider can either build new metrics for the customer or enhance the existing metrics and KPIs.”
This should be accomplished through a collaborative working session whereby the new partner can get familiar with your company’s culture, vision, and overall goals. “We put ourselves in the customer’s shoes,” says Joe Tague, Canon’s director, business applications. “We want to see it through their eyes.”
2. Conduct a complete data assessment. In order to design the right solution, your partner will need a clear picture of what data your operations are generating, reviewing, and utilizing. After identifying any gaps, the provider will be able to make recommendations for improvements across people, processes, and technology.
This is also where companies that don’t have metrics in place or good data management processes can make significant improvements in both areas. “A lot of companies have data in various formats, but that data often means different things to different departments,” Tague explains. “We use data as a focal point for establishing baselines and designing the right solution for each company.”
3. Review and update all existing standard operating processes (SOPs). During the initial documentation phase, your partner will carefully review any existing SOPs (i.e., a document that provides specific directions and instructions on how to complete certain processes) and the goal of each of those SOPs.
Wisdom says this step is critical because many SOPs are drawn up and then thrown in a desk drawer and forgotten about. As a result, they’re rarely updated to reflect current operating conditions or corporate goals. “We always push for SOPs to be living, breathing documents,” Wisdom explains, “that apply not only to specific processes, but also to the operation as a whole. This helps create a collaborative flow across the entire operation.”
4. Recruit, onboard, and train new employees. With labor shortages making life difficult for logistics managers right now, Canon takes the pressure off these professionals by recruiting, onboarding, training, and allocating workers to specific areas of the operation. With a pool of human resources to draw from, the company puts new candidates through the paces of different classes, testing, safety training, and other steps to get them ready to work. It also helps transition existing labor into new roles. “We work to bring anyone who is doing a good job over to the Canon team,” says Tague.
Stage Two: Operational Go-live and Start-up
With the initial engagement and assessment and planning phases completed, it will be time to implement your new managed services arrangement. During the first six months of this new setup, you can expect:
5. Operational go-live or provider transition. Whether you are opening a new operation or transitioning responsibilities to a new provider, the go-live date is a critical milestone. This is when the initial reviews, planning, and meetings begin to pay off. During implementation, you will be testing out the new processes in the “real world,” using new technology, and working with team members who have been trained on specific tasks and responsibilities.
“This is the point where all of the planning and training pays off and allows material to move through the processes seamlessly,” says James Flora, solutions consultant, Warehouse & Distribution at Canon, which utilizes a robust project plan to ensure that all elements are in place by the go-live date. Canon also has a team of support professionals onsite to facilitate a smooth transition when products start moving through the facility.
6. A tried-and-tested implementation process. If you picked a materials and logistics services provider with experience in your industry, it should have a good idea of exactly what is going to happen when the switch is flipped during implementation. Using a confirmed scope of work, for example, Canon ensures that everyone understands exactly what’s expected of them. It lays out all the SLAs and metrics in advance and establishes continuous improvement targets that align with the company’s own operational goals.
Finally, all employee training is complete and safety measures put in place before anyone sets foot on the warehouse floor. Combined, these measures ensure the smoothest possible implementation on day one, and the best results during the first six months of the relationship.
7. Support network and communication strategy. “There’s never been a startup that went 100% according to the plan,” says Flora, who tells companies to find a materials and logistics provider that will be closely involved during implementation and during the first year, knowing that challenges are bound to surface during this period.
Canon’s cross-functional operational support team members is there onsite to facilitate the initial implementation process. Your provider should also have a solid transition methodology and documented implementation plan in place, and should share those materials with you on a daily and weekly basis.
“We follow specific methodology and best practices that are documented and communicated clearly to the client as the implementation rolls out,” says Tague. “That way, everyone knows exactly what’s going on; there are no secrets or surprises.”
Stage Three: Continuous Improvement & Operational Maturity
Any successful business relationship requires nurturing and honing over time to ensure a win-win scenario for everyone involved. An alliance with a materials and logistics services provider is no different. Here’s what you can expect for the long-term:
8. Strong cultural integration. If your partner does not talk to you about how it is going to integrate with your warehouse culture, a red flag should go up right away. Much more than just vacuous spaces filled with machinery and products, fulfillment centers are run by people. That means materials and logistics services providers must factor people, processes, and technology into their implementation plans. If one leg of this stool is missing, the partnership won’t meet expectations.
“Whereas a typical 3PL has its own, offsite culture, an integrated materials and logistics services provider should have underlying ethics that obviously can be maintained in any environment,” Wisdom points out, noting that Canon’s goal is to align with each unique customer culture, embrace their brand, and fit in with their operations. “Because we’re all on the ‘same team,’ it works much better than if you were to simply outsource your warehouse operations to a separate entity.”
9. Ongoing strategic guidance, support, and fine-tuning. A true business partner will be there when you need it, providing guidance and support throughout the life of the relation-ship. By communicating agreed-upon SLAs, sharing metrics, and using quarterly business reviews to help optimize its customers’ operations, Canon provides a long-term solution—and not just a quick fix—for supply chain operators.
“We use clear communication during quarterly business reviews and discuss all statement of work updates that may need to be made,” says Wisdom, whose team is often called upon to make additional tweaks and improvements that help get customers even closer to attaining their goals. “We review the original process map, look for bottlenecks to focus on, and then optimize where needed.”
10. An alliance that brings value to more than just the warehouse. The right materials and logistics services partner will literally “embed” itself in your operations and stick with you through thick and thin. It will also continue to enhance your ware-house operations and help you adjust it, expand it, or optimize it as needed. Wisdom says the right partner will also look beyond warehousing and help you maximize your success as an organization, and not just a fulfillment center.
“At Canon, we provide a dependable warehouse and material movement solution that allows customers to focus on building and growing their core businesses,” Tague explains. “If changes are warranted, we make those adjustments, bring the ‘car into the pit’ for modifications, and make sure our customers are always running finely-tuned warehouse operations.”
Take the Next Step
By aligning with a materials and logistics services provider that offers a holistic solution, understands your operations, helps you tackle your goals, and provides ongoing expertise and support, you will be future-proofing your operations for maximum success.
From labor management to inventory optimization to facility design and all steps in between, Canon serves as a trusted partner that continues to meet or exceed customer expectations in today’s ultra-competitive distribution environment.