Category Archives: Change management

Collaborative Onsite Outsourcing

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In response to the article in LinkedIn: 5 Smart Reasons Employers Should Stop Hiring for Full-time Jobs written by J.T. O’Donnell,  I wrote that companies must utilise all forms of employment including full-time, part-time, outsourced and contracted. Only this will allow companies to get the best ROI from the available and seemingly diminishing pool of Supply Chain talent (I have included my original response below).

Today I find a paper published  by C.H. Robinson stating a similar fact. Their paper “Collaborative Outsourcing: How to gain value from a strategic onsite logistics resource” is focused on Logistics and how outsourced suppliers may need to place some of their own resources on site with their customer.

Not only is this good reading but is a good guide to what and how companies can optimise their requirements.

My original response to JT’s article: There many facets to the concept of “employment”, the problem as I read it, the author seems to be extreme one way and many of the comments extreme the other way. In reality there should be more project driven roles (contract) but this does not detract from the fact that there also needs to be a large part of the organisation that remains permanent. Companies should be utilising the best people for the particular task/function in the most appropriate manner. Some tasks/projects are always better to be managed by either outsourcing or having a person contracted for that project, remembering this can be a short term or long term/extended contract, other roles should nearly always be done on a permanent basis in-house (full-time or part-time). Aside from the perceptions of individuals many companies do not analyse their requirements correctly, too many focus on an immediate requirement or need and hire to an outdated expectation for example: “THIS should be a permanent role and we will have to hire a temp for THAT one”. Also: Project driven roles should not be considered “Temps” – there is too much negative stigma attached to this title, call them Project Contractors, for that is what they are. There are far too many people not being allowed to be the best they can, or to give the best they can to the company they work for, in any capacity, due to so much inaccurate and inconsistent thinking about what a “job” is.

Improving Your Freight Costs 1 – Prepare for task/project

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The first phase of any project is to gather and consolidate the data you have already, the same goes when reviewing your freight costs.

Having previous costs and your freight profile allows you to identify patterns which will form the foundation of your cost review.

To have the right type, quality and volume of information is critical. This information should be at a consignment level and include: date, destination suburb, post-code, actual weight (this is different to charged weight) and volume as well as the number of pieces in the consignment and the total cost per consignment. Extra data that will help is the type of customer/delivery e.g. residential, commercial or industrial locations.  If you do not have this data already, contact your current freight provider(s), they should be able to give you all this information in a spreadsheet – and at no charge.

You will also need to have the rate tables from your current providers. These ‘tables’ will show you the Cubic Conversion, Fuel Surcharge and kg charge (within each weight break if they have variable charges). I will explain these terms and how they affect you in a later blog.

As you can see there is nothing in this data that is commercially sensitive, confidential or will contravene any privacy requirements. But it will allow you to complete the task with confidence.

As for time period covered, it depends on the cycles. It is best to have enough data to cover 1.5 to 2 cycles. This will usually mean 18-24 months of history. If you do not have seasonal/annual cycles a lessor range would be suitable. Let’s say your cycle is 1 month, then 2 months history would suffice, although it would still be just as easy to consolidate 6 months’ worth.

Other information that you should acquire includes the current performance of your freight provider, how many consignments do they lose, damage or just misplace. How many other functions are impacted by the performance of your freight provider, for example accounts receivables/payables, customer service, sales, etc, what issues do they have? All this will help as you go through the project.

Gathering all this information will help you during the next phases. Phase-2&3 will be to build a history table for quoting against and formulating services that are important to your business, eg: a high DIFOT %- Delivered In Full On Time.