Cpi Case Study

While CPI understood that using a third party logistics company had benefits especially when getting material from overseas the method in which they chose the company fell short. Cost is always an important factor in choosing a supplier or vendor or in this case a logistics company but it shouldn’t be the only consideration. CPI didn’t do any due diligence when selecting this company and had no idea on what their true capabilities would be.

When considering a 3PL company there are a few things that need to be discussed and considered. Flexibility and ability to meet or exceed demand is one of the most important factors. By starting with a clear set of goals and needs and turning that into a tangible way of accessing a third party Logistics Company’s capability’s CPI could eliminate a majority of the issues that are causing delays and cost issues. By weighting what is important to the company they can rate the current 3PL company with its competitors and see which one is a viable option with the least amount of issues. This is referred to a Factor Rating. Below you will find a sample factor rating on what some of the key issues for hiring a 3PL company would be in order to help CPI solve the current issues it is facing. The factors that seem to be most critical in deciding on a good 3PL company are listed on the model below. Transit Time, since on time delivery is important to CPI, so that they can get their product made and to the customers in a reliable time frame, this has a higher weight. Obviously, cost is a big priority for CPI and so that factor has a high rating as well. Capacity, and the ability to ship large quantities is important as is keeping damage or lost material to a minimum. In order to use factor rating efficiently the company determines all relevant and important factors and assigns a weight to each one. These weights total 1. The alternative that has the highest score is the best option and should be considered