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For a company like Huber Engineered Materials that views outsourcing as a strategic process, selecting the right 3PL is an exact process that focusses more on technology, operations and management skills than on cost.
ACCORDING TO A RECENT survey done by the consulting firm, Accenture, and Northeastern University, more than 65 percent of manufacturing companies in the U.S. outsource a portion of their logistics. In fact, the outsourcing process is so commonplace that selecting a third party logistics company (3PL) is often handled like a routine purchasing decision.
"Some of the selection processes we take part in are simply a matter of filling out a request for information form and waiting to hear if we are a finalist," says Joe Egertson, president of Hub Group St. Louis, a regional division of the global 3PL that provides intermodal and transportation management services. But such a routine approach was definitely not the case when the Hub Group participated in a 3PL selection process for Huber Engineered Materials, a J.M. Huber company, located in Atlanta.
From July through November of last year, Brian Bender, manager of transportations services for Huber Engineered Materials, went through an extensive selection process that looked at the finances, operations, technological capabilities and management strengths of 15 3PLs under consideration. These 15 candidates were then whittled down to four, "We did the usual financial reviews and reference checks, but the main criteria for eliminating candidates was just looking at the constituency they served," says Bender. "We wanted someone who knew our type of business and had successfully managed the same types of tasks that our Engineered Materials group is faced with every day."
"This was a very interesting and rewarding process for us," Egertson continues, in part because he won the business. "Brian is a detail guy who plans years ahead. Wc learned a lot from our involvement in the methodology."
Huber Engineered Materials is a supplier of engineered minerals and specialty chemicals for a wide range of industries including paper, paint, coating, electrical cable, building commodities, plastics, tire and rubber and many more. The company has earned its success through what Bender calls operational excellence, which he wanted to bring to his transportation group.
"The outsourcing decision for us is strategic,"...