In the logistics industry, we’re all about supply chain capabilities; the more capabilities we have for our clients, the better. Put another way, we love saying “yes.” If a client asks, “can you perform X,Y, and Z tasks?,” we take pride in being able to answer in the affirmative.
But, sometimes, “yes” can lead to trouble. In our new eBook, 5 Reasons Why eCommerce Supply Chains Fail, we identify “setting unrealistic expectations” as one of the 5 major supply chain pitfalls. So, while we love saying “yes,” sometimes a well-supported “no” is exactly what you need to hear from your 3PL.
A Supply Chain Scenario
Here’s a real-world example. The CEO of a growing marketer of jewelry and other accessories wanted to move fulfillment operations from the Southeast to Dallas. The strategy was questionable and the timeline aggressive, but the eTailer’s 3PL continued to move forward to please the determined CEO. In the end, major issues surfaced with inventory and order accuracy at the new facility and the planned move was cut short (as was the CEO’s employment).
Who’s to blame in this scenario? The aggressive CEO? We don’t think so.
The CEO’s role is to determine what she thinks should be done to best serve the company, as well as the actions to be taken. To implement these actions, the CEO has chosen an EXPERT: a 3PL provider. The CEO might own the “what” and the “why,” but it is up to the 3PL to take care of “how” those things will happen.
The CEO fulfilled her end of the bargain. It was then up to the 3PL expert to manage their multi-channel fulfillment capabilities and carry out the “hows.” At a certain point – likely the very beginning of the project – the 3PL should have known that the deliverables would be impossible, as requested.
It is the 3PL’s responsibility to blow the whistle and yell “STOP.” Being eager to please is one thing, but rushing headlong toward almost certain failure is quite another.
So, who won in this scenario? No one. And, who lost? Everybody, especially the CEO that the 3PL was trying so desperately to please. And it all could have been avoided with a two-letter word: “no.”
When “No” is Best For Your Supply Chain
In the July-August 2010 issue of the Harvard Business Review, the article “Stop Trying to Delight Your Customers” further elaborates on the necessity of saying no. The authors ask, “how often does someone patronize a company specifically because of its over-the-top service?” The research found that such service only marginally affected loyalty. Now, on the flip side, “How often do consumers cut companies loose because of terrible service?” The answer here was “all the time.”
This is not to say that 3PLs shouldn’t go above and beyond for the customers. Pleasing the client is of vital importance. However, they should pause and weigh the options when met with an unreasonable request.
The best third-party fulfillment companies will see the possibilities, but they will also recognize the landmines that clients sometimes don’t. Shippers need to understand that a firm “no” from a 3PL is the best advice they could get.