Page 5 - Logistics News June 2018

Thought Leadership
strengthens the relationship as the partners
are cognisant of the fact that avoidance of
disruptions is far more cost-eff ective than
response and recovery measures. The alignment
of long-term goals and objectives with strategic
focus allows the fi rms to establish a long-term
view of disruptions, giving them more time
to fi nd cost-eff ective methods of avoiding or
managing possible future disruptions.
Factors that weaken a relationship between
3PL and client in the pre-disruption phase
include common business problems such as
a misalignment between the expectations
of the client and the capabilities of the
3PL, poor system and process integration
between the 3PL and client, as well as a lack
of understanding of the other party’s business
processes. The success of the relationship
prior to a disruption also plays a major role,
and young or troubled relationships tend to be
weakened by disruptive events.
When disruptions do occur, eff ective and
transparent communication and information
sharing as well as collaborative eff orts assist
in strengthening the relationship between
the 3PL and its client. This phase highlighted
the ability to determine the root cause of
disruptions and the ability to solve problems
once the root causes have been determined
as essential elements in the strengthening of
the relationship. Taking an ethical business
approach and demonstrating commitment to
solving the problems caused by disruptions
also contribute to strengthening relationships.
Other important factors that add to the strength
of the relationship are a physical presence on
site, the responsiveness of the 3PL when a
disruption occurs and having an introspective
focus by considering the fi rm’s own processes
or people as possible causes or contributors to
the disruption. Finally, the absence of monetary
focus and the willingness of both fi rms to
share the fi nancial burden or absorb losses in
resolving the problems brought about by the
disruption have a considerable positive eff ect on
the relationship.
In the during-disruption phase, the study
found that the individuals involved in the
relationship may contribute to the weakening
thereof should they be unable to handle
confl ict situations in a professional manner.
A lack of communication and collaboration
between the 3PL and client, and inadequate
June 2018 | Logistics News
responses to disruptions such as blame
shifting also exacerbate the weakening of
relationships. The occurrence and late detection
of a disruption also has negative eff ects
on the relationship, especially if the 3PL is
deemed to be responsible for managing such
disruptions. Opting for lengthier but more
cost-eff ective solutions to disruptions due to an
overemphasis on monetary value on the 3PL’s
part often results in confl ict and the subsequent
weakening of the buyer-supplier relationship.
Many of these factors contribute to a general
lack of trust in the relationship.
The study found that there are two major
elements that strengthen the relationship
between 3PL and client after the disruption has
taken place, the fi rst of which is a process of
learning from the disruption and how to more
eff ectively deal with disruptions in future. The
second element revolves around the monitoring
and follow-up procedures of informing the client
of residual issues after the disruption has been
resolved, and whether such a disruption might
occur again in future.
Upon investigating this phase for elements
that weaken relationships, it was not particularly
noted to have signifi cant weakening eff ects if,
for example, there is an absence of learning
from the disruption. It would therefore seem as
though the majority of relationship-weakening
eff ects stem from the pre-disruption and
during-disruption phases.
While disruptions can certainly have
severe detrimental eff ects on the supply
chain and its participants, it is important for
practitioners to note that certain actions
before, during and after the disruption can
strengthen the relationship between a 3PL and
its client. It is particularly important that the
parties involved in these relationships work
together in fostering trust along with a mutual
understanding of the other party’s business
and that collaboration, proactive management,
eff ective communication, quick responses
from competent individuals and the absence
of a monetary focus will further benefi t the
strengthening of the relationship.
Continuous engagement in the development
of stronger relationships was also found to be
of critical importance to practitioners as actions
taken in the pre-disruption and post-disruption
phases have a signifi cant eff ect on the outcome
of the relationship in the face of disruptions. •
7