@Risk

3PLs and their customers appear to be misunderstanding each other’s priorities.

For example, the recently published Global 3PL & Logistics Outsourcing Strategy Report 2011-12, from eyefortransport, found that:

• 36 percent of 3PLs believe lowest price is the most important factor for shippers when choosing a new 3PL, as opposed to best quality service (30 percent).  Shippers, on the other hand, rate best quality service as the most important factor (64 percent) and lowest price as far less important than 3PLs expect (15 percent).
• When it comes to the non-renewal of existing 3PL contracts, 3PLs overestimated the importance of their competitors offering a cheaper price by a dramatic 49 percent.

This kind of fundamental disconnect needs to be addressed so the industry can successfully face the challenges that lie ahead.

“This year’s survey findings really reinforced some of the trends we’ve seen for the last 18 months,” said eyefortransport’s Executive Director, Katharine O’Reilly.  “The insights are not really unexpected, but when you see figures like this, especially in areas where 3PLs and their customers are fundamentally misunderstanding each other’s priorities, we really sit up and take note.  These are gaps in understanding that need to be filled if the industry is to move forward and grow as it should.”

In other findings: (more…)

Concerns about foreign corporate corruption, bribery and other compliance and integrity-related issues are causing businesses to re-think or even terminate deals with potential (and existing) business partners.

Mitigating risks like these has become a top priority, and new results from Deloitte’s annual Look Before You Leap survey show that: (more…)

In the wake of walkouts at several Chinese manufacturing facilities over the past few months, I’m starting to wonder about China’s future as a low-cost manufacturing base.

Most recently, the Toyoda Gosei plant, located just north of Beijing, was shut down by a one-day strike last Tuesday. Although short-lived, the work stoppage underscores growing employee discontent at the facility, and a strike resolution came only after managers agreed to discuss wage increases, Reuters reports.

A few days later, Honda Motor Co. was in the middle of a similar dilemma. The company had to re-negotiate wages to prevent a strike at Honda Lock (Guangdong) Co. in the Pearl River Delta  –and that wasn’t the first time Honda has had to respond to employee demands for better pay. According to Bloomberg Businessweek, wage concessions by Honda after walkouts that shut down three parts factories in the past month may erode the company’s net income by as much as five percent. (more…)

Supply managers walk a fine line.

Their job is to maintain the often delicate balance between internal customers, suppliers and buyers. It’s a tricky juggling act even in the best of times. So, what happens when budgets get squeezed? How are supply managers faring during this protracted stretch of cost-cutting and tight inventories?

A new study by Oregon State University supply chain researcher Zhaohui Wu took a look into those questions, and the results may surprise you.

Wu hypothesized that since research has shown that companies believe supply managers should have the ability to “wear many hats” and take on multiple roles as needed, that this ability would have a positive relationship with the manager’s interpersonal relationships –particularly these days, when negotiation and collaboration are so critical to business success.

The data he collected indicates precisely the opposite. (more…)

Walmart suppliers in China aren’t meeting the company’s most basic ethical workforce standards, according to a new report from China Labor Watch (CLW).

The report, titled “Walmart Standards Fail, Workers Suffer,” focuses on five suppliers that manufacture goods such as decorations, shoes, tool, paper boxes, and curtains.  CLW investigated these suppliers by conducting external interviews with workers. The group found out that workers in these factories typically endure: (more…)