In common with many shippers you might have third-party specialists on hand to provide expert advice and help you manage the company’s transportation needs. But are you prepared to go a step further as some shippers have done by transplanting such a team in your office so that it becomes a permanent fixture?
The concept is not for every organization. Some managers balk at the notion of handing over important analytical and managerial activities to people who are, in effect, quasi-employees, in that they become part of the fabric of the office but represent both the client and the enterprise that actually employs them. However, as in many areas of professional life, the concept of dedicated, onsite teams is probably not as outlandish as many managers assume once they have taken the time to study it in detail.
There are numerous variations on this service option but basically it is a variant of Managed TMS, the transportation management solution that has emerged over the last 10 years or so. Here are some reflections based on an onsite relationship TMC has with food company Ocean Spray. Hopefully these insights will shed some light on the way these arrangements work.
First, to make it clear, the term “onsite” means just that; a dedicated team employed by a third-party provider – in this instance TMC – that resides in your office as an in-house transportation management unit. In the case of Ocean Spray, the team consists of a strategic account manager, an operations manager, four operations and logistics analysts, and two dedicated schedulers/customer service representatives. The team reports directly to two people at Ocean Spray: the manager and director of transportation.
What kind of work do these folks do? Well, there is no such thing as a routine day, but the workload can be divided into buckets. The analytical bucket is wide because in addition to providing regular performance reports –monthly score carding exercises, for instance – the onsite experts respond to ad hoc requests for data. Examples might include an analysis to figure out where an unexpected budget variance has come from, or a look at the cost implications of shipping out of a new location. Some calculations fall in between the routine and the ad hoc. Take, for example, an exercise to revisit three recent bids during the first part of each month to make sure that the contracts are still on track.
The ongoing service bucket covers various bases. Team members might get pulled into Ocean Spray customer meetings to provide expert advice and run specific analyses. There are impromptu meetings almost every day to talk about specific issues. An unusual feature of this particular arrangement is that the onsite team schedules all shipment delivery appointments for Ocean Spray.
The consultancy bucket is the most all-encompassing, in that the team functions as in-house consultants. But unlike conventional consulting relationships, the onsite folks never walk away because they are stationed permanently at Ocean Spray. Managers have unhindered access to team members who don’t even have doors on their cubicles to close! But like traditional consultants, the team can draw on the expertise and market intelligence provided by the wider TMC group to advise its client. For example, is a particular freight rate reasonable in the current market?
Based on the above, what kinds of organizations are suited to the dedicated onsite team service option? There are many answers to this question, but here are a few: companies that do not need to micro-manage transportation, that prefer face-to-face access to third-party specialists, and do not support the kind of IT resources required to provide big-picture analyses of the transportation market.
Finally, the magic ingredient is trust. It has taken five years for TMC’s Ocean Spray team to become fully embedded in the client organization because there is only one way to establish trust, and that is to earn it.