Presenting ARC's Fourteenth Annual Orlando Forum
ARC World Industry Forum: Where Industry Leaders Meet to Solve Their Most Challenging Issues
February 9-11, 2010 - Orlando, Florida
Performance-based Outsourcing:
Maximizing the Value of 3PL-Customer Relationships
Manufacturers and retailers have been outsourcing their logistics operations to Third Party Logistics (3PL) providers for more than two decades. But in many cases, after the honeymoon phase is over and all of the “low hanging fruit” benefits have been achieved, many 3PLs and their customers find themselves in a rut, unable to reach higher levels of sustained value.
There are many reasons why 3PL-customer relationships fail to achieve their maximum value potential, including:
- Companies want their logistics service providers to be more proactive and creative, yet they often dictate every detail of how a 3PL should operate.
- Many contracts are “evergreen, eternal” but they include a 30-day escape clause.
- 3PLs and customers approach outsourcing relationships from different perspectives. 3PLs generally want to be viewed as “strategic partners” while many customers, especially their procurement organizations, view 3PLs as “vendors” and this misalignment often creates friction in the relationship.
How can 3PLs and customers break out of this rut and take their relationship to a higher level of value and performance? The answer, in many cases, is for 3PLs and customers to adopt Performance-based Outsourcing (PBO) principles.
Performance-based outsourcing (or “vested outsourcing” as some experts are calling it today) requires 3PLs and customers to break free from the way they have always worked together (see “Performance-based Outsourcing in Logistics” and “Performance-based Outsourcing: What’s in It for ‘We’?”). PBO focuses on outcomes instead of transactions, on the WHAT instead of the HOW, and on creating long-term, win-win partnerships. It is a mind shift that may be difficult for some 3PLs and customers to achieve, but for those who embark on the journey and succeed, the rewards are far greater.
This seminar will address the following questions and topics:
- What is performance-based outsourcing?
- How is PBO different from gain sharing and other types of contracts?
- What are the steps to creating a successful PBO relationship?
- Who is practicing PBO today and what benefits have they achieved?
- What are the main obstacles to implementing PBO, for both customers and 3PLs? How do you overcome these obstacles?
The Performance Based Outsourcing Seminar runs concurrently with other programs at ARC's Orlando Forum. For information on the other programs:
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Who Should Attend
This seminar is a must-attend event for:
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Logistics and procurement executives at manufacturing and retail companies responsible for 3PL selection, contracting, and relationship management.
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Business development and account management executives at third-party logistics companies responsible for sales, contract negotiation, and managing customer relationships. | |
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Agenda
Following is the schedule for the seminar.
Tuesday, February 9
Welcome reception and networking session, sponsored by AVEVA, held poolside from 5:30 - 7:30 PM.
Wednesday, February 10
Presentations and interactive discussion sessions from ARC analysts and leading experts and practitioners of PBO, including:
- Kate Vitasek, founder of Supply Chain Visions and a faculty member at the University of Tennessee's Center for Executive Education, will present "Vested Outsourcing: Five Rules that Will Transform Outsourcing". Vested Outsourcing is a new business model that is based on a research study with the University of Tennessee and the U.S. Air Force in a search for a better way to outsource. Vested Outsourcing transforms outsourcing relationships into business partnerships that drive innovation to achieve what most normally think of as tradeoffs when trying to achieve costs and performance improvements. Kate will share the top ten critical (and often invisible) flaws inherent in almost all outsourced business relationships and will show attendees the five game changing rules of Vested Outsourcing that will help organizations build true, vested partnership with their providers and customers — the only partnership worth having.
- Stan Dubbert, Director of Supply Chain Operations at Whirlpool, will present "Aligning Leadership, Objectives, and Metrics between Whirlpool and Its 3PL Partners". Stan will take you through a process that Whirlpool and its core 3PL providers have implemented to align 3PL management and labor to Whirlpool's service, quality, and productivity objectives every shift, day, week, month, and quarter for every distribution center. The process is centered on common metrics that encompass simple visual management tools that engage warehouse labor on a daily basis, and a series of quick and efficient review sessions that ensures alignment of Whirlpool and 3PL senior leadership teams. The discussion will also focus on the agreements Whirlpool has with its 3PL providers that align financial rewards for achieving overall service, cost, and quality objectives. This process has resulted in a 4% improvement in on-time delivery while reducing labor costs by 19% — delivering higher service at a lower cost and is simple and cost effective to implement.
- Jim O'Brien, former Vice President of Global Logistics at Thermadyne Holdings, will share his perspective on the topic as an executive with over 20 years experience in distribution operations, transportation, planning, and logistics within the CPG, health care, and industrial sectors, as well as the 3PL industry, having worked at Exel.
- Richard MacLaren, General Manager North America at Unipart Logistics, will present "Unipart's Journey (So Far) to Performance Based Outsourcing Relationships and Outcomes". Richard will take you through Unipart's journey and experience in performance-based outsourcing highlighting its long-standing relationship with Jaguar and other global brands. Through this journey, Richard will highlight lessons learned, growth of the relationship into other global markets, the customer successes, and then take you through a recommended framework for making PBO work (based on Unipart's experience) and the future outlook.
- Mark McEntire, Vice President of Operations at Transplace, will present "Lean Six Sigma: A Long-term, Strategic Approach to Outsourced Logistics Relationships". Mark will demonstrate how Transplace has incorporated Lean Six Sigma (LSS) practices into its customer relationships, along with the deployment of a business intelligence solution, to continuously identify, analyze, and deliver added value. Mark and a customer (to be named soon) will provide insight to how LSS is acted upon in operations and how this has manifested to ongoing cost reductions and incremental service performance improvements.
In the evening, Siemens is sponsoring a reception and dinner at Epcot from 6:15 - 10 PM, where attendees can network with peers in a fun and casual atmosphere.
Thursday, February 11
Moderated “think tank” sessions in the morning where attendees will discuss and share their perspectives on 3PL-client relationships, as well as the opportunities and challenges they see with PBO and how to address them. The seminar will conclude at noon with a wrap-up discussion of next steps. |
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Executive Speakers and Panel Participants
The following executives are among those who will present or participate in a panel discussion for this forum program.
 Stan Dubbert
Director Supply Chain Operations, North American Region, Whirlpool
Stan is accountable for on time delivery to trade customers and consumers, along with cost and quality throughout Whirlpool's 10 regional distribution centers and 85 local distribution centers that are managed by a core group of 3PL providers. During his 15 years in the appliance business he has held positions in inventory planning, demand planning, S&OP, and operations. Most recently he has been successful in utilizing lean methodology in implementing a management process across the distribution network that aligns Whirlpool's service, quality, and productivity targets with 3PL providers.
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 Brian Fues
General Manager Operations, Whirlpool Account, Penske Logistics
Brian is responsible for the west coast regional distribution network for Penske Logistics’ Whirlpool account, including large regional operations in Southern California, Stockton, Denver, and the Pacific Northwest, which represent over 3.5 million square feet of warehouse space. With more than 20 years experience, Brian has served in various operating and corporate management roles including Vice President of Operations Southwest Area, Master Black Belt and Area Manager Midwest. Prior to joining Penske, Brian worked for CSX Transportation and served 7 years as an officer in the U.S. Army.
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 Richard MacLaren
General Manager North America, Unipart Logistics
Richard has held senior roles in finance, sales, business development, and general management within Unipart with extensive experience in managing performance-based contracts and now runs the Unipart North American Business, including the Jaguar aftermarket operation in North America as President and General Manager, Unipart Logistics North America. His career has covered lean, finished goods, and aftermarket components supply chains in the automotive, technology, and retail sectors. As a key team member in establishing the Jaguar aftermarket operation in 1998, Richard was instrumental in establishing the performance based contract, lean processes, and enabling systems, and also the cultural transformation of the organization.
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 Mark McEntire
Vice President of Operations, Transplace
Mark joined Transplace in March 2005 as the General Manager for the Domtar account, and 19 months later he earned the role of General Manager for the Del Monte Foods account. In February 2009, he was promoted to Vice President of Operations for all Transplace CPG business. This business vertical includes Del Monte Foods, Sunny Delight, Cott Beverages, Chicken of the Sea, and Colgate-Palmolive. Mark’s 21 years in transportation and logistics include experience with JB Hunt Transport and Penske Logistics. His functional responsibilities have included operations, sales, customer service, and contract logistics. In 2001, he completed a two year Six Sigma certification program with General Electric and is a GE certified Black Belt. In June 2009, he became certified as an APICS CSCP.
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 Jim O'Brien
former Vice President of Global Logistics, Thermadyne Holdings
Jim is an accomplished supply chain executive, a leader, with over 20 years of experience in distribution operations, transportation, planning, and logistics within the CPG, health care, and industrial sectors. Currently, he provides consulting services on the welding industry to institutional investors through the Coleman Research Group. Most recently Jim was the Vice President of Global Logistics for Thermadyne Holdings, the global manufacturer of welding, cutting tools, systems and consumables. At Thermadyne, Jim was responsible for European and Canadian operations, global planning, global distribution operations, packaging operations, trade compliance, transportation, planning, supply chain systems, and RFID. Jim has experience from both sides of the table managing the negotiation and relationship between third party providers and clients. Previously, he served in senior roles at Bic Corporation, Exel, Pepsi Bottling Group, and Quaker Oats.
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Roger Sechler
Director of Transportation and Supply Chain Strategy, Del Monte Foods
Roger is currently the Director of Transportation and Supply Chain Management at Del Monte Foods, based in Pittsburgh, PA. He joined Del Monte in January 2006, and was moved into his current role in October 2008. He is responsible for transportation procurement and service across multiple modes, and also has ownership for developing collaborative supply chain programs with key customers. Prior to Del Monte, Roger held several supply chain roles within Johnson & Johnson. |
 Kate Vitasek
Faculty, University of Tennessee Center for Executive Education
Founder, Supply Chain Visions
Kate is a nationally recognized innovator in the practice of supply chain management. She is the founder, faculty, and lead researcher in the concept of 'vested' (also known as vested outsourcing), which was developed in conjunction with the University of Tennessee. Kate's approaches and insights have been widely published in respected academic and trade journals. The Journal of Commerce recently recognized her as a “Woman on the Move in Trade and Transportation” for her leadership in the profession, and DC Velocity Magazine dubbed her a “Rainmaker” for her efforts in helping to build the logistics and supply chain profession. Logistics Quarterly and Supply Chain Digest have both honored her as a “Woman in Supply Chain” and she was honored as a “Woman of International Influence” by Global Executive Women. She has served on the Board of Directors for the Council of Supply Chain Management Professionals as well as on the Supply Chain Council’s Deliver Committee.
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 Steve Banker
Director, Supply Chain Management, ARC
Steve has been with ARC since 1996. His focus areas include warehouse management, supply chain planning, operational excellence in supply chain management, supply chain visibility, supply chain risk management, and tax efficient supply chains. Steve is one of the best known industry analysts covering supply chain management and a frequent speaker at industry events. He has been widely quoted on supply chain issues and authored many articles in supply chain and operations journals. In recognition of his contribution to the supply chain and logistics field, Steve was selected as a “Pro to Know” by Supply & Demand Chain Executive Magazine. Steve’s user focused research has included ROI analysis of a variety of supply chain applications, benchmarking, and best practices.
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 Adrian Gonzalez
Director, Logistics Viewpoints, ARC
Adrian has been with ARC since 1999. His focus areas include supply chain and logistics solutions, supply chain execution, supply chain sustainability, 3PLs/Logistic Service Providers, transportation management, global trade management, logistics outsourcing, On-Demand/Software-as-a-Service, and trade security. Prior to ARC, Adrian held various leadership positions in product development, manufacturing, and program management at Motorola, Clare, and Polaroid. He speaks frequently at industry events and conferences and he is regularly quoted in industry publications. In recognition of his contribution to the supply chain and logistics field, Adrian was selected as a “Pro to Know” by Supply & Demand Chain Executive Magazine.
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Location
 The Forum is held at the Rosen Centre Hotel in Orlando, Florida.
Rosen Centre Hotel
9840 International Drive
Orlando, Florida 32819
800-204-7234 or 407-996-9840
www.rosencentre.com
Attendees should make their own hotel reservations. Reservations can be made on-line or by calling 800-204-7234. ARC has contracted a reduced rate of $180, based on availability. When making reservations, please specify that you will be attending the ARC Forum.
The hotel is located 15 minutes from Orlando International Airport. (For directions and map: www.rosencentre.com/Location.aspx ) Transportation options include Mears Transportation or local taxi. Reservations to the airport using Mears must be made 24 hours in advance at the Guest Services desk. The hotel is also conveniently located near many of Orlando’s attractions: 1 mile from Sea World, 5 minutes from Universal Studios, and 10 minutes from Walt Disney World. The Rosen Centre’s Guest Services will gladly arrange attraction tickets and transportation, golf tee times, tours and more. The Rosen Centre offers complimentary daily shuttle services to Sea World and Universal. In addition, the I-Trolley (www.iridetrolley.com, 407-354-5656) makes popular stops all along International Drive. There is an I-Trolley stop across the street from the Rosen Centre.
Please contact Orlando's Visitor Information Center at 407-363-5874, www.visitorlando.com, for information regarding current events in Orlando. For discounted attractions in Orlando, please visit the Orlando Convention Aid website. Their on-line travel guide offers discounts to restaurants, golf, attractions, nightlife, shopping, and more, including making dinner reservations for you. A coupon book will also be available at the hotel when you arrive.
Meeting Location
The Performance-based Logistics Outsourcing Seminar is located in Salons 17/18.
Monday Evening Welcome Reception
A cocktail reception will be held on Monday evening, 6-9 PM in Ballroom D and E of the Grand Ballroom on the first level of the hotel. Spouses are welcome to attend.
Forum Registration
Forum registration is available during the Monday workshops, the Monday evening reception, and each morning beginning at 7 AM.
Innovations Showcase
The Showcase will be held in Ballroom D and E and is open during the Monday Evening Reception and during breakfasts and breaks on Tuesday and Wednesday.
Continental Breakfast
Continental breakfast will be served in the Showcase area (Ballroom D/E) at 7 AM on Tuesday and Wednesday. Thursday’s breakfast will be held in the Junior Ballroom Foyer.
Lunch
Lunch will be held in Grand Ballroom C on Tuesday and poolside on Wednesday (indoor seating available in Grand Ballroom D/E). A box lunch will be provided on Thursday.
Golfing Opportunities During Your Stay
Shingle Creek will provide a discounted price for 18 holes of golf for all ARC Forum attendees. Please mention "ARC Advisory Group" when reserving tee-times to receive the discount ($99). Free transportation from the Rosen Centre to Shingle Creek is available (see Towncars in the Valet Area).
Shingle Creek
9939 Universal Blvd.
Orlando, FL 32819
866-996-9933 or 407-996-1559
shinglecreekgolf.com |
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To Register
Forum Fee
The Forum fee for attending the Performance-based Outsourcing Seminar only is $495. The fee includes breakfast and lunch each day, a reception on Tuesday evening, a dinner and reception on Wednesday evening, and all program materials. Group rates are available. Please contact info@arcweb.com for more information. (NOTE: This fee does not include admittance to the other Forum programs.)
Cancellations and Substitutions
Substitutions may be made at any time at no additional charge. The registration fee is fully refundable up to three weeks prior to the Forum date. A 50% cancellation fee will be assessed after that date. All cancellations must be received in writing.
Registration Methods
Please use one of the following methods to register for the Forum:
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