RELATIONSHIP ORIENTATION
Lead Logistics Role Makes Sense For Menlo
A relationship between logistics service provider Menlo Worldwide and a client in the surgical equipment space, Maquet, is proving to be another example of the value of genuine joint-working and the benefits to shippers and operators of the lead logistics provider (LLP) model.
Maquet is the medical systems division of Swedish group Getinge. It manufactures a wide range of products for operating theatres and intensive care units. It has sales operations in 25 countries and production facilities in Germany, France, Sweden and Turkey.
Its relationship with Menlo began when it acquired the life support systems division of Siemens Medical, an existing customer of the logistics service provider, in 2003. This soon developed from a spare parts storage agreement (truly mission critical when you have products for cardiopulmonary surgery and so on, see image below) into an operation covering inbound transportation, outbound deliveries and all aspects of Maquet’s logistics activity.
The manufacturing company was expanding its business across Europe and beyond. It admitted openly that it wanted specialist logistics help in moving into one country after another and, after a number of projects of this kind, agreed with Menlo that they should sit down together and plan a global programme.
“The programme, which we’re rolling out at the moment, means we can support Maquet’s expansion across the globe in an orderly fashion,” explains Gert Askes, managing director of European operations for Menlo Worldwide.
Clearly this involves in-depth discussions, openness, shared visions and careful planning.
Mr Askes says the two companies have built a new and separate business case for each Maquet division in each new country they have gone to. They started with territories that they believed would represent ‘low-hanging fruit’ and the roll-out programme gathered pace from there.
This momentum has helped Menlo make an impression right across Maquet, even in the United Kingdom, which presented a tough challenge early in the programme.
Mr Asks explains: “The UK operation is not very big, and Maquet was already getting very good rates there. But we did better and we proved ourselves and we were able to accelerate the programme from there. As soon as you’ve done three or four and got good results, it’s very difficult for the rest to say ‘no’.”
The acceptance of the Maquet people on the ground is always necessary, though. It’s here that a lead logistics provider can find life difficult at first, compared to the traditional contract logistics dynamic of the service provider bowing to the demands of the shipper at all times.
LLP means logistics service providers poking their noses right into the business and, in many instances, making the decisions on what happens.
In this case, though, as in all the successful LLP examples we have come across, the relationship between shipper and logistics service provider is strong.
“It’s fully transparent,” Mr Askes continues, “we trust each other. Some projects have been slower to come in and there have been some internal issues, but Maquet knows we’re not trying to earn a secret buck. It’s not about numbers. It’s the soft stuff, how you create buy-in; we really invested in that.”
This LLP programme has been running for two years now and will continue its roll-out. More Menlo customers will sign up for this type of service, Mr Askes feels sure.
He says: “A lot of people like the model. The trend is that customers are looking for more from their logistics service providers, but that means logistics operators have to be ready to build and maintain this kind of relationship with shippers. Squeezing the orange harder is no longer enough. That’s not getting us anywhere.”
For him, there is no doubt that logistics relationships should be ready to move on now. What he calls “a transformation in thinking” has begun. Business is picking up for many companies, so a greater number of them, as far as he can tell, are prepared to initiate change now and take a chance on LLP.
“If it’s a low-risk proposal, why not try?” he says. “If you can build in enough ‘go forward’ moments, why not give it a shot?”