Being able to continuously improve is becoming more and more crucial in a highly competitive supply chain management market. Arguably, nowhere does this trend become more evident than in the Pharmaceutical industry and particularly in cold chain logistics, where the standards of technical, legal and operational scopes are especially high as they directly affect human life.
Innovation has always been one of the core principles of Yusen Logistics and our research collaboration with Cardiff University in 2016 undoubtedly added value in some demanding areas of supply chain management for customer-centric logistics.
Connectivity is a priority at Yusen, as we strive to deliver a world-class customer service. From an international perspective, we wanted to explore relationships between 4PL, its customers and providers. A multitude of connections between partners always exist at different levels with varying degrees of importance and value. Some relationships diminish, while some grow to become strategic.
Yusen’s Cardiff research team set an ambitious target to analyse
what makes the relationships within a 4PL network successful
and how to replicate this success?
Over the summer months of 2016, the Cardiff research team conducted a series of linked interviews with European cold chain logistics suppliers to establish the importance of communication and assess the current level of relationship.
This was based on a bespoke hundred-point survey ranking sheet, which was used for blind benchmarking of the participants against the performance criteria using the Analytical Hierarchy Process. Following this, the research team undertook analysis of gathered data and the design of a Conceptual Model with the description and importance rating of various relationship attributes, affecting factors and possible improvements.
A multitude of findings were discovered.
Yusen's experience and market intelligence confirmed some preliminary concepts; however, there were surprising factors that highlighted the importance of additional research.
Of note, those who had direct contact with customers before a 4PL model was introduced – or ‘legacy’ LSP - felt much more sentimental about former relationships with customers. It is diametrically opposite to those companies which didn’t enjoy such a direct connection in the past and dealt with Yusen from the start.
It has been revealed that the past ‘direct’ set-up was less demanding, whereas with the introduction of Yusen as the 4PL more information is required from the carriers. This information is used by Yusen to improve the supply chain and build more efficient and trusted cold chain logistics. Ultimately, this tendency is a sign of the validity of an outsourcing strategy: where companies rely on the expertise of a 4PL partner.
Successful outsourcing leads to more robust supply chain management with streamlined solutions and cost-effective strategies.
Unveiled was a very strong link between lack of visibility within the supply chain and the level of relationship.
It is an established fact that where better forecasting is available, a relationship is more strategic, while less overview of physical and informational flows leads to much more transactional relations.
Without smart forecasting, planning, and reporting, the supply chain fails to reach its full potential. This highlights the necessity of better technical and analytical tools - like Vision I - at all supply chain levels. Giving a 4PL greater autonomy in providing outstanding service will ensure a robust accountability structure to the customers on one side and improved supply chain management on the other.
The major drawback of this project, albeit expected, revolves around the fact that the research considered just one side of the 4PL model relationships: the customers were not involved in it. It is obvious that the upstream part of the supply chain has an enormous effect on the downstream relations, especially when it comes to forecasting and customer requirements. This investigation will be the next step in an exciting project between Cardiff University and Yusen Logistics in 2017.
Identifying and addressing these issues will undoubtedly help Yusen to achieve its ultimate objective: delivering greater value to its customers and become the undisputable leader in cold chain logistics for pharmaceuticals.