Renewing Outsourcing Agreements and a Perspective on the Role Procurement Plays in this Context
In this session executives will focus on the renewal of logistics outsourcing relationships. For many, logistics outsourcing is now a mature space for logisticians and 3PLs alike.
With many outsourcing agreements up for renewal, there’s a lack of information available to help supply chain executives at this important juncture. This session offers groundbreaking research that includes in depth interviews with executives of Logistics Service Providers (LSPs) and Supply Chain Owners (SCOs). This session will examine these key themes:
- The incumbent is often favored as the costs of switch providers are high;
- SCOs rarely wait for the renewal of agreements to implement major changes in the way in the LSP-SCO relationship to better serve their business;
- LSPs eager to renew do not wait for the last months of the contract to “wow” the SCO with everything they can do;
- Renewal is a great time to change the basis of the relationship by modifying the compensation approach;
- Successful relationships adopt more collaborative compensation and management styles;
- Procurement involvement is generally not an impediment, but they do not add much to the process; and
- Undisclosed senior management agendas can derail the process, unexpectedly. After a brief overview of the research findings, a SCO procurement executive will describe how procurement can bring value to the renewals process, and an LSP executive will share insights from a number of very different recent renewals.
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