Insights from a logistics partnership

Highlights insights gained from five years of operating experience in a logistics partnership between a large US retailer and a provider of international logistical service. The insights gained from this partnership show that a third‐party logistics provider can help a firm achieve substantial results. The path to achieving these results is not without its difficulties, but many of these problems can be anticipated and appropriate actions taken to minimize their disruption. Establishing a measurement system that allows easy and integrated reporting of the status of the enterprise is essential if real progress is to be made in a logistics partnership. An extensive formal and informal communication strategy is essential to address the issues arising from the difficulty of combining two different organizational cultures. Finally, this partnership has shown that if the rewards for both partners are real, tangible, and substantial the partnership can endure.