After these steps are completed, there would need to be an assessment of the logistics costs and fees including a break-even and Return on Investment (ROI) analysis across the Ocean Spray supply chain, in addition to an Internal Rate of Return (IRR) analysis specifically within Ocean Spray. Compounding all these factors is also the assessment of external factors including seasonality inherent in their business model, and the initiative to create more effective packaging that maximizes Ocean Spray's shelf space in stores, specifically focusing on square containers to accomplish this (Hannon, 51). After this first phase of completing a strategic assessment was complete, the next step would be to define timeframes to form a strategic relationship. An evaluation of the various forms of strategic relationships, from partnerships, traditional outsourcing relationships to strategic alliances would be considered. The potential partner capabilities and core competencies would be evaluate din the context of Ocean Spray's unmet needs and priorities. Based on this assessment, a partner would be chosen and an agreement structure defined. At this point, many companies opt for a pilot program to define the structural operating model of the relationship (Sink & Langley, 169), also using this time to specifically focus on the key performance indicators (KPIs) and measures of performance critical for ensuring supply chain visibility over the long-term. Pilots are often used to minimize risk (Sink & Langley, 169) and also fine-tune the KPIs and measures of performance to evaluate 3PL relationships over the long-term. Only after a successful pilot is completed can the launch of the project be planned and executed. Of all factors that Ocean Spray must plan for, change management, or educating the many people whose jobs will change significantly...
By taking these steps and thoroughly planning the launch of the 3PL relationship, Ocean Spray will have a successful launch of their 3PL relationship.
Once the selection process is complete, what kind of relationship do you feel would be most appropriate: vendor, partner, strategic alliance, or some other option?
As the Ocean Spray supply chain is highly unique and relies on a high level of efficiency to ensure the profitability of its growers, in addition to the unique core competencies the company has, support the strategy of having a vendor-based relationship with a transport-oriented 3PL provider. Any vendor-based relationship has the potential for conflict due to conflicting objectives of vendor and client, and for Ocean Spray, this is made even more potentially divisive due to the many needs of their co-op-based business model and supply chain. What is needed is a high degree of collaboration and sharing of risk, ensured through KPIs and metrics of performance, so that each side of the partnership can alleviate potential areas of conflict before they become too divisive. For Ocean Spray, their ability to partner with a vendor that can integrate at the process, system and person level with their unique supply chain requirements will make or break their 3PL initiatives.
References
David Hannon. "Ocean Spray leverages software to manage inbound logistics " Purchasing 19 May 2005: 49-52. ABI/INFORM Global. ProQuest. 10 Sep. 2008
Harry L. Sink, C John Langley Jr. "A managerial framework for the acquisition of third-party logistics services. " Journal of Business Logistics 18.2 (1997): 163-189. ABI/INFORM Global. 12 Sep. 2008
Perry a Trunick. "Sea change at Ocean…
