Sunday, December 23, 2007

Merry Christmas! Happy New Year!

Joyous Holidays!

Merry Christmas!

Happy New Year!

Thank you for checking out my blog this year!

I going to take a few weeks off to enjoy the holiday season with my family. I hope you all will do the same!

I will start posting again in January 2008!

Many sincere thanks, Michael J. Stolarczyk


Anonymous Anonymous said...

Michael - can you post your thoughts on the following comment?

"Annual savings dollars generated by a 3PL should always exceed the costs billed by that same 3PL for the same year"

As a practical application, here is an example:

ABC company has a inbound spend of $13 million. The 2007 cost of using the 3PL for an inbound warehouse and occasional transportation management was $1.7 million. The direct savings generated by the 3PL were $1.6 million. Indirect savings are not measured, but anecdotally they are high, with lower inventory, shorter cycle times, higher turns, better information, more control...etc.

The relationship has been going for about 5 years and all the low fruit has been picked. Also, many efficiencies were gained in those previous years as well as cost savings.

On the one hand, an 11% savings was generated in 2007; on the other, the 3PL cost was greater than the savings.

Would you consider it a mistake to make the statement at the top of this post?


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