The Role of Transportation in Supply Chains and Business

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The whole kit and caboodle. They were going to outsource that to a 3PL provider. They had already written the contract and they're asking us to review the contract. So I'm going through this thing. I have never put so much red ink on something in all my life. I felt like I was grading papers again. (50:17 - 57:32) So I went back to meet with them and was Dr. Vazell, what are your comments about our contract? They were concerned. They saw all the red ink. I said I just got one question. I said what is your motivation for doing this? I said because whatever that is has to be reflected in the contract. Otherwise it's really hard to know whether it's a good contract or a bad contract. And it got really quiet. The silence was for so long it got just pure awkward. And then finally the head of the supply chain started laughing. I'm looking going this doesn't seem very funny to me. Then they all started laughing. I said why are you laughing? Even I started laughing. He says because we have no idea why we're doing this. This was a 30 million dollar contract. I said how can that be? I said it's because our former CEO said we're bad at logistics and anybody could do it better than we can. And I knew they were good at it because I'd seen all the benchmark. I said that's not true. What do we do? I said don't do this. There's time for outsourcing. There's a time not to. This is not the time to. In fact you're about to you're about ready to give away your key competitive advantage. You're about ready to get you're out ready to pay somebody to take your competitive advantage and give it to you all your competitors. Does that sound like a good idea? No. The point of it is they had no core definition to go back to. You got to have a core. Once you get that you can start building around it. Why do you call this supply chain logistics? There's logistics for lots of things. There's bank logistics, there's hospital logistics, healthcare logistics, there's logistics for the hospitality industry, there's chemical logistics. So what we try to do here is to put this boundary on here say we do supply chain logistics. That's our gig. Now that shows up in a lot of different industries but that's different than in the world of Wells Fargo they have cash logistics. We do supply chain logistics. If you'll accept this there are five activities that come with this definition and they go like this. The first is customer service. Number one right out of the gate. Why would that be the first activity you would plan or design when you were planning or designing a supply chain? Very good or that's right it's the requirements. So working with our clients one of the first things we do is say let's get a customer service policy here. You saw I asked do you have a customer service policy? Oh yeah we have a

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