Are you playing to win, or hoping not to lose?

A FIRST class panel brought together the vast supply chain nous and experience of Mars supply chain director for UK and Ireland Grace Smith; Joanne Moore, GB&I customer service & logistics director at Suntory GBI; Fabian Koehler, deputy group CEO at Culina Group, as well as Gavin Chappell, vice president of food and GM supply at Asda.

The debate centred on the client – 3PL relationship. Gavin said fear played a big role, with many ‘not playing to win, but simply hoping not to lose’, drawing an analogy with Arsenal’s recent uber-cautious Champions League Final performance, much to the chagrin of the some of the attendees.

Gavin said: “Too often we are in an ‘avoid losing’ mentality because outcomes aren’t aligned. Retailers tend to be focused on sales, availability, fulfilment, lower inventory and only then cost. But 3PL priorities are to make sure all costs are covered, make some margin, and get a contract renewal.”

Gavin suggests 3PLs could learn from software providers in terms of customer service.

“The best software companies have customer success managers, they know nothing about the code, they just focus on what you want to get out of the software,” he explains.

“When we have had problem with system providers, the relationship has been transactional. You have to trust, and it has to start at the top. The historic paradigm has been lowest cost wins and I don’t think that can continue in the modern world.

“The best experience I had was on a three year MHE project. There was significant cash on table but I spoke regularly with the supplier’s CEO and even when we had issues, we never resorted to getting the contract out, the focus was on solving the problem.”

Grace Smith added that while the focus should be on problem-solving, attitude plays a big part.

Grace says: “We have a cultural dilemma in the UK, we always focus on the nice part, when we should focus on the areas where the conflict could be. You need to surface the stuff that will feel sticky before it arises and work out a way to productively deal with it.”

Joanne Moore added: “I’ve worked in environments were shouting, swearing and storming out of meetings was the norm and I have been in situations were open conversations happened even under great pressure. It is the latter that builds trust and long term partnerships.”

Joanne works on the principle of the manufacturer setting the direction and the 3PL amplifying it.

“We outsource logistics for a reason, I want a 3PL to understand our business and bring ideas beyond what we have thought of, this can be on digitalistion, automation, consolidation, future planning and more.”

Grace Smith cautioned against excessive focus on technology.

“With headlines being dominated by automation and AI, it is easy to think the future of our supply chain will forged in a lab. Seeking a silver bullet can mean we are ignoring the foundations.

“For me, mastery is the innovation and there are six non-negotiables that 3PLs have to get right: safety, execution, reliability, service, discipline, and control,” said Grace.

Fabian Koehler, deputy group CEO at Culina Group brought the 3PL perspective to the panel and outlined his view on innovation.

“There is no easy answer,” he said. “For Culina, if you look at chilled and fresh produce in a multi-user setting, we have the network and many customers. We own the process and we should drive the technology.

“With contract logistics it’s more complex, early engagement between customer and logistics partner is important as well as open communication and pre-tender understanding of what is actually wanted.”

SCALA Consulting executive director Chris Clowes concluded: “The relationship between client and 3PL has changed a lot in the last 20 years. It was adversarial and combative, now we are much more likely to see genuine partnerships and there are many examples of productive long term relationships.”