March 20th 2006

How performance metrics can take your 3PL relationship to a new level

Audax Managing Director David Warrilow addressed, as a main speaker, Outsourcing Logistics Europe 2006, Conference and Exhibition, Amsterdam, March 20-21, 2006

In his talk on "How performance metrics can take your 3PL relationship to a new level") at Outsourcing Logistics Europe 2006, Audax Managing Director David Warrilow stated that good relationships between 3PLs and shipper's customers are based on trust and mutual understanding. He argued that this can only come from both parties sharing a common and agreed view of the service being delivered - and using metrics to provide an objective view of performance.

Warrilow explained that the cause of much of the friction between 3PL and the shipper's customer is caused by the wide difference between the service level being reported and the actual service perceived. Thus, quarterly reviews can become ill tempered affairs, leading to 3PLs losing contracts three years down the line.

Typically, the 3PL reports a 98% success rate, while the customer constantly complains about late or incorrect deliveries. Warrilow explained the reasons for this and the problems that occur as a result - for example, the massive disconnect between the physical handling of the freight and the paperwork detailing its content.

He went on to show why this need not be the case and how both sides can work together to monitor and improve the process to the advantage of all concerned - shipper, customer and 3PL.

"Accurate service measures, reduced costs and improved customer satisfaction all result from better process monitoring," he said. "The best monitoring comes from genuine event recording using unambiguous time stamps.

"When the 3PL and customer agree on obtaining KPIs (Key Performance Indicators) this way, they will be able to close the gap between their very different claims about performance," added Warrilow. "In addition, the same metrics will help the 3PL to win and retain business."

Warrilow's talk complemented the theme of the conference - "Best Practices for Managing 3PL Relationships"- and was built on his and Audax's experience in working across three continents with some of the world's biggest high tech and pharmaceutical manufacturers.

Meanwhile, Audax had another presence at the event; the company highlighted its software and consulting offerings on a stand in the exhibition area.