Partnership Building

When we moved our 3PL to Mexico, customer returns became more complex. To be admitted onto the IMMEX permit, our goods had to be in "first condition."  Since we did not have a 3PL in the US to process returns, we contracted our returns process to a partner who completed them on a special project basis. This process was high cost and had an average leadtime of 6 weeks from customer to in-stock inventory. Additionally, the process included 3 partners: 

1. Customers send returns to our returns processor. 

2. The returns processor sorts resellable products from unsellable. They ship the good products to our crossdock in San Diego. 

3. At the crossdock, units are inspected by a third party inspector and then trucked to our 3PL in Mexico.  

I believed that there was an opportunity to reduce the time and number of partners in this process. 

There were a few ways that we could approach this issue to get to a final result.  

1. Approval to for our returns to ship from our returns processor directly to the Mexico 3PL

   1. Number of Partners in process: 1 

   2. Potential Roadblocks: Legal approval for shipping from a partner without quality control, difficulty procuring an in-bond truck on budget

2. Use a returns processor in San Diego who can truck directly to the Mexico 3PL

   1. Number of Partners:  2

   2. Potential Roadblocks: Establishing a new relationship

1. Determined  requirements for a new partner to make it a worthwhile change

   1. Returns processor willing to work on returns without commitment to a broader set of costs (e.g. 3PL)

   2. Located in San Diego 

2. Leaned on my network in San Diego
   I used my network to connect to leaders in the 3PL, returns, and IMMEX industry in San Diego and Tijuana. Through my connections, I met a specialist in IMMEX 3PL work that was hungry for new lines of business. We decided to test-run a returns process together to test a longer business relationship.  

3. Setting up a process
   Walked the 3PL team through our ideal process for returns and worked together to implement a process with technology underpinnings. We worked closely through development, user testing, and process tests to approve the new partner and process. 

4. Contract negotiation
   As we were a test client, we signed an agreement for a discounted processing price. 

5. Process initiation
   As soon as the process was approved and contract signed, we sent our returns from customers to the new returns processor. We began to see pay-offs immediately. 

The new process led to a 67% decrease in time to return units from customers to inventory,  33% decrease in partners, and a 10% reduction in cost of returns.   

1. Strong partnerships are built when both sides "win".
   Negotiating works most favorably when both parties come to the table with something the other needs. To get the most out of a partnership, you want to look for mutually beneficial relationships. 

2. The highest pay-off comes from thinking outside of the box.  
   If current solutions aren't effective, then find someone willing to work with you on a new one. At the worst, you are getting something for a cheaper cost than you could otherwise as first-to-market. At the best, you are creating a product for a need that's out there for others.