Third Party Logistics (3PL) – Riverside Logistics

September 23, 2022 by Logistics

BUILDING A RESILIENT SUPPLY CHAIN

Best advice I can give is to Start from the bottom.

In today’s Logistics environment, building a resilient supply chain is more critical than ever. No sure way exists to overcome all the risks that comes your way. Things like the Ukrainian war and the lingering effects of the pandemic have had severe impact on just about everyone’s supply chains. Product lead times are double or triple what they used to be, and that’s if you can get the products at all. The cost of freight, raw materials, labor and finished goods have skyrocketed. Both the International and domestic US transportation systems are a mess. There are containers sitting that can’t unload, there are warehouse shipments loads that can’t be picked up, shipments are taking twice as long to deliver than before, there is a lack of warehouse capacity to store goods, and overall prices for freight, fuel, labor, and just about everything else have gone up dramatically.

Considering this decidedly negative environment, and the uncertainty of how long current conditions will last, what can you do to make your Supply Chain more resilient. Here are some suggestions.

Increase your base of supply. Go from a plus 1 supplier base to a plus 3 base. Extend the geographic base as well. Keep one area from controlling and hurting your supply chain.
Make and get commitments from your transportation providers to provide enough equipment to meet your extended needs. Contract for this capacity and take a “now is better than later” attitude.
Expand your inventory levels and buffer safety stock levels to compensate for longer lead times. Make sure your Min/Max system is reset for larger inventories and longer pipelines.
Lower both your and your customer’s expectations for OTC cycles. Product will take longer in the pipeline. Get used to it and make sure your customer acclimates to the new “normal” as well.

There are three key drivers to establishing better resiliency. “RFC” , “R”edundancies, “F”lexibility and “C”ulture change.

Increase redundancies. Hold extra inventory, increase your supplier base, and lower capacity utilization levels. By being redundant, you are giving up efficiencies. Inventory is cash, unused or not-working cash. This is the tradeoff made when carrying more inventory than your normal model requires.

Added Flexibility. Adopt standardized processes. This lets you switch production across your manufacturing network. Make it easy to substitute your production across the various sites in your network. If they handle the work in a standardized fashion then you can bounce your production and distribution around as conditions dictate, without skipping a beat.

Put key functions in sync with supply chain demands through a centralized organizational approach. Plan to postpone. Give yourself the ability to wait and develop more WIP goods that can be finished in a variety of ways. Align your procurement strategy with your suppliers. Make sure that your supplier relationships are deep and long. Don’t get caught short handed when one of them goes out of business or has a catastrophic event that impedes their ability to supply you.

Cultural change. Have processes that provide for continuous communication across the enterprise, inside and outside the building. Distribute the power for making decisions. If the power is concentrated in a few hands your organization won’t be able to handle disruption well. Those closer to the fire know how to handle it best.

Condition your teams for disruptions, how to handle them, and what the protocols are to fix them.

There are five pillars of supply chain resilience

Vulnerability

Management Culture

Procurement

Operations

Demand & visibility

Vulnerability. Assess your organizations weak links. Where are you most at risk? Shore up as best you can these points of weakness. Make yourself as bulletproof as possible. There are tradeoffs in this process. It is not cheap to build in redundancy and mitigate vulnerable spots in your supply chain. It is better to know and mitigate them on the front end than suffer the consequences on the back end. Almost a “you can pay me now or pay me later” situation.

Management Culture. Management must be fully on board to support the changes necessary to make your supply chain more resilient. They will understand the picture if you provide the correct model of the monetary costs to do nothing vs the upside if you take the right steps…NOW.

Procurement. How you buy, who you source your buys from, and where are extremely important factors in supply chain resiliency. Let’s face it, if you single source in today’s environment, you are in big trouble when that source falls down. You must investigate and understand your alternative supply sources and put in place a blueprint of how you need to use them.

Operations. There must be a clear level of communication between the operations teams and the procurement teams. Management must make sure that they are exchanging forecast and plans in a way that produces a clear path forward in dealing with shortage, delays, and cost increases. It is not unusual for Ops and Sourcing teams to have different sets of metrics and drivers that they use. It is extremely important that these teams operate in sync with one another. Otherwise, the results will be very disappointing.

Demand & Visibility. Not enough can be said about making the Demand mechanism as clear as possible throughout the organization. The more visible the demand signal is, and the more time spent on how to meet it, the better the results will be. Demand signals and forecasts are difficult during normal times of stability. In today’s less stable environment the whole supply chain can get whip-sawed around by the market forces in play today. It is therefore of extreme importance for the organization to put the time in to dial in the organization to demand signal.

Making your supply chain more resilient is extremely important to the overall effectiveness and health of your organization. Spend the time necessary to align your organization on what’s needed to make it as bulletproof as possible. If you do, the reward will be substantial.

Riverside Logistics Consulting does this (supply chain analysis) for a living and would be happy to take a hard look at your individual supply chain and make recommendations on how to shore it up. This process can pay high dividends in a short period of time. If you need more information, contact Jim Durfee at 804-474-7700 extension #4. We’re here to help.

April 14, 2022 by Logistics

What does it cost to hire a third-party logistics company to manage your transportation?

Often, a third-party logistics Company (3PL) can allow you to save money!

The cost to hire a Third-Party Logistics Company (3PL) is usually done on a pay as you go basis.

For example, if you use a 3PL to handle and manage your transportation needs, the typical way that they charge you is by marking up their transportation costs before they invoice you.

Here are some good reasons to hire a 3PL to manage your transportation:

BUYING POWER: Riverside has numerous clients, using the same carrier base. This allows them to leverage this volume into lower rates than if you dealt directly with the carrier yourself. The amount of discount and reduction that Riverside receives, plus our markup percentage, is usually very competitive to the level of cost you yourself could find or negotiate. This means that we are usually more competitive, even with our markup than you would be on your own. Lower cost means cost savings.

EXPERIENCE: Riverside has negotiating experience across many industries. We know carriers give more competitive pricing the better they understand the characteristics of the freight (i.e. commodity, dimension, weight, origin, destination and product value). Our goal is to find the best cost/service ratio for our customers using our visibility of a larger network portion of the supply chain.

MANAGEMENT: Riverside has experience and expertise that allows us to be your Transportation Department. This means you don’t have to pay for a staff to manage and execute your transportation needs. We do it. This represents a substantial advantage to you. We handle all your freight audit and pay activity, making sure that the invoices are fully documented and are correct before we pay them.

SYSTEMS: Riverside uses technology to capture the relevant transportation data to efficiently run your business. This is important in today’s supply chain. It means we can track your shipments, transaction cost, and shipping and receiving metrics. All this can be done in real time. A 3PL utilizes these systems to properly manage and execute a logistics strategy that keeps you competitive.

In summary, a transportation 3PL brings a disciplined approach to purchasing and executing your transportation strategy. The ultimate goal is delivering service to your customers at a competitive price while saving you money.

February 21, 2022 by Logistics

What can Supply Chain Consultants do for me?

Consultants sometimes have a bad rap right out of the gate. After all who wants someone to tell you how to do your job or run your business?

Frankly, if your business is growing and changing you probably need a consultant to help you chart your future.

This is not a small under-taking and it can be challenging but very rewarding when approached with the correct partner. The key is understanding your objectives, what is realistic to expect as a return on your investment, and the type of knowledge that a Logistics Consultant can bring to the table.

When do you need a consultant?

Some good indicators might be the following:

You are either privately held or a division of a large company in a specific market that is a new focus.
You have reached 50 million dollars in sales revenue.
You have primarily operated from one location.
You want to grow your business by expanding geographically.
You want to grow by acquisition.
Your current logistics team is knowledgeable, but they have never operated multiple locations, evaluated multiple modes of transportation, or possessed the support staff to train new employees.
Transportation is a big part of your total cost of going to market.
The value of your business in either service or manufacturing is very high per employee.
You have product coming through a port but are uncertain of what ports are best and why.
Your Supply Chain Costs are increasing dramatically in Warehouse and or Transportation and you do not have a formal way to measure your investment.

Let’s look at and talk about Supply Chain and Logistics Management Consultants (LMC). They are SME (subject matter experts) on how to move your Logistics Network from where it is today, to where it needs to be in the future. Network evaluations are relatively painless, but they take time to complete properly. For example, if you feel that a 6-week consultation will allow you to plan for and adapt to a new network, don’t waste the money.

If, however, you realize that the process could and should take up to 6 months to fully realize, then go for it. Because like most things that are keys to your business success, they take time.

Supply Chain costs are rising, becoming more complex and now demand more automation. It only makes sense to have someone who has been down the path before, who can guide your team and bring in expertise if your current management does not provide that expertise. As your business expands, its demands for adequate supply chain management increase. These increases are like stepping-stones. They go up in increments or buckets. For example, you may have to go from a single warehouse to multiple warehouses. Or quite the opposite, you may have grown by opening small warehouses throughout your network and now need to take a hard look at a smaller number of warehouses, maybe even just one, with a larger single set of inventories. And, oh by the way, you may need a WMS (warehouse management system) and a TMS (transportation management system) or an upgrade to both if you already have some in place. Additionally, how do you, or how will you, handle managing you transportation needs. Will you do it “in-house” or utilize external management?. What are the upsides and downsides of each approach? How have you accommodated supply chain risk? Did you factor in the trade-offs between operating different (multiple) facilities as opposed to one large facility? This logic also holds for how, when and where you source your product. If the pandemic has taught you anything, it has taught you the value of operating a flexible supply chain for both sourcing as well as moving product through your system.

So how does a LMC Consultant provide you with value?

Here’s how: If competent, they can create a roadmap of “AS IS” and “TO BE” showing how you stack up against industry baselines, how you maximize your competitive supply chain profile and how to develop a sustainable “TO BE” supply chain that helps rather than hinders your business as it expands.

All in all, the question is not whether you need a LMC consultation, its whether you can afford NOT to hire and use one. Market conditions are moving faster than ever. How long would it take your management team to learn what they need to know? Savings in speed can provide a lot of value. Rather than debating a topic for a year a consultant can provide solutions much faster. How much is that worth to your business? If you do not hire a consultant will opportunities vanish?

Typical savings that we encounter from our own consulting efforts usually generate savings in Supply Chain costs, NET savings, of between 15% and 25% long term. If you’re in it for the long term and you have a business that is growing, you need to strongly consider hiring a LMC Consultant to help steer your business through the myriad of supply chain issues affecting your business now and in the foreseeable future.

Riverside Logistics, has been in business for over 25 years and has accumulated a very “long and strong” set of capabilities to analyze, recommend, and execute a Logistics plan for you company. Give us a call at 804-474-770 extension 82 . We are here to help!

February 10, 2020 by Logistics

Virginia is a Great Location for your Business to Export

by Rick Holden

There are many great things happening in the Commonwealth of Virginia. Key among them is the ongoing effort to attract new businesses whose goals include exporting product.

Citing the ongoing trade war and saying states must take international trade into their own hands, Gov. Ralph Northam recently announced a plan to take Virginia from ranking 41st in the country for exports to ranking in the top 20.

The strategic plan sets significant goals, aiming to increase trade output by 50% in 15 years. Essentially, this would double the amount of export business in the Commonwealth.

An executive summary of the plan outlines two main ways the state will assist businesses who engage in international trade: first, by investing in trade development services and second, by helping new business locate in the Commonwealth and helping existing businesses expand.

In order to execute this far reaching goal, the state of Virginia will be offering incentives for companies who want to export all or some of their products form the Commonwealth. As new and existing companies look to make this move, it will be to their advantage to engage with Third Party Logistics Providers (3PLs) who are strategically located in Virginia and have the resources and services to assist in this effort.

3PLs in the Commonwealth who have strategic warehouse footprints, transportation services, systems, processes, as well as supply chain knowledge can help many of these companies take advantage of what Virginia has to offer. Companies can better focus their limited resources on their core business and outsource the supply chain function. This would reduce the overall total investment as well as provide a more rapid ramp up period.

In this economic environment speed to service is key. Companies who can start operations more expeditiously will be positioned to take advantage of the incentives the Commonwealth of Virginia will be offering.

October 24, 2019 by Logistics

Riverside Logistics Grand Opening was a Great Success!

1-Riverside Logistics Grand Opening Ribbon Cutting 10-22-19 — Riverside Logistics Grand Opening Ribbon Cutting October 22, 2019

Thank you to the Mayor of the City of Richmond, Levar Stoney and Tom Capozzi, the Chief Sales Officer for the Port of Virginia for attending Grand Opening of Riverside Logistics new world headquarters on October 22, 2019.

We were very excited to host some of the top decision makers in the Virginia Business community who ventured out in the rain to celebrate with us during our Grand Opening event.

Riversides Logistics leadership team and employees proudly provided tours to community and business leaders to demonstrate the advantages of this new corporate facility and 125,00 square feet of warehouse space. Located directly across from the Richmond Marine Terminal (RMT), Riverside’s headquarters is just off I95 near 150 Chippenham Parkway and the 895 bridge and located within a 1 -2 days drive of 75% of the U.S. population.

Rick Holden, Vice President of Business Development for Riverside Logistics, welcomed everyone to event and thanked the employees for all of their dedication and hard work to help make this growth possible.

Keith Hamlett, Vice President of Riverside Logistics, commended the Mayor and the City of Richmond for their desire to work with businesses to ensure success while helping citizens find jobs, transportation and housing. He also commended the Port of Virginia for the successful completion of their expansion project and the investments they’ve made in infrastructure to grow business in the Commonwealth. “We knew we needed a home that would make us visible to the Richmond Marine Terminal. We knew we needed to be in an area that would support our employee growth and help provide necessary employee support services. Today we can say, “We have found a home”. We are in the business of helping people solve logistics problems; we are in the business of finding new outstanding employees to meet those logistics challenges. We are now part of the Richmond City Community and are focused on working with our Community partner the Richmond Marine Terminal. So, when you leave today, I challenge you to “Share the Excitement”.