Jozef Opdeweegh: Why the first two weeks as a CEO of a new company are the most important

No matter if you are an entry level employee or a company’s brand-new CEO, the first day on the job can be nerve-wracking. Even so, your path to professional success begins the moment you walk through the door. Read on to discover why the first two weeks as the CEO of a company are the most important.

The recruitment process:

When considering an individual for a leadership role, the candidate is typically subjected to numerous interviews by recruiters, the board, and shareholders. Oftentimes, the final recruitment process stage involves the candidate providing example insights and an example strategic plan for the business. The candidate would then present the plan to the board, mapping out key strategic goals and proving why they (the candidate) are the best pick for the role. The audience will assess the plan and presentation through the lens of what the company may look like after three to five years under the candidate’s leadership.

The first week on the job:

Once the chosen candidate successfully passes all the hurdles and negotiated a satisfactory employment agreement, it is time for them to assume the leadership role. The first week is an important week, and longtime CEO, Jozef Opdeweegh, recommends spending those first days like this:

Day 1 – 2: Establish a vision, mission and core values/behaviors

Day 3 – 4: Map out the key drivers of success

Day 5: Draft the strategic plan

Opdeweegh says, “it is my experience the senior leadership team gathers in person to attend this 5 day-exercise. Of course, the size of that group depends on the size of the company, but I would caution against groups in excess of 40 -50 people because the ability to interact openly and effectively diminishes with an increased group size.”

Day 1-2

The first two days are really all about culture. “In the mission statement, you define the company’s current business, its key goals and the key milestones to achieve those goals,” says Opdeweegh. The vision statement describes how the company’s future state will look. And then finally, the corporate culture is defined by a set of shared core values and behaviors that will best enable the company to achieve its goals. Opdeweegh says, “it is paramount to focus on core behaviors early on: the future success of the company, and therefore your future success, largely depends on it. You cannot have a large group of associates work towards a common set of goals if they do not share a set of collective beliefs.”

Day 3-4

The following two days center on the key drivers of success. Opdeweegh suggests asking, “What do we need to focus on to be successful?” Obvious topics include financial success, and to satisfy the board, shareholders and lenders. It may sound somewhat counterintuitive, “but in my experience, many members of the senior leadership team do not necessarily have a good grasp of what the main drivers of financial success are. An extensive tutorial may be in order,” notes Opdeweegh. Topics that require discussion are historical valuation of a relevant peer group and the drivers of those valuations: compounded annual rate of revenue growth, EBITDA-margins, EBITDA-multiples, evolution of earnings per share, level of diversification across customers, geographies, industry verticals and product or service offerings and many more. “You need to ensure the leadership group acquires a sufficiently large level of financial literacy in terms of balance sheet, cash flow and P&L to allow them to monitor the financial performance of the company,” advises Opdeweegh.

Day 5

Finally, on day five, Opdeweegh says, “you should present a draft-summary strategic plan that consists of a P&L, balance sheet and the key strategic goals for the next five years.” This draft is then open for discussion with the group. At the end of day five, a subcommittee should be appointed with the specific task to develop a more detailed strategic plan within 30 days and to present that plan to the group. The executive team needs to be intimately involved in this exercise.

The 2nd week on the job

In the second week on the job, Opdeweegh recommends, “organizing a roadshow to get in front of the rest of the organization. You need to be out there and allow the associates to get to know you. You should spend time on the shop floor, demonstrating a decent level of understanding of the operational processes, but more importantly, you should interact with your coworkers.”

In your first couple of weeks on the job, and during your entire leadership tenure, it’s important to be relatable and approachable. Work to be humble, kind and authentic. You are human, and there is something very endearing about sharing stories about how you have faced challenges in the past and how you have successfully dealt with them. They need to see somebody who is fair, inclusive and open to new ideas. You are nothing more than member of the team who is there to support his co-workers. A good CEO does not find authority in his job title, but rather in tangible achievements.

6 Ways Corporate Culture Works As An Instrument To Guide A Company Through Transformation And Change

Transforming a business from its current state to a desired future state demands not only passion but also disciplined planning. In line with his view of corporate culture as a change agent, Jozef Opdeweegh outlines what such a transformation requires: a well-articulated and concise strategic plan, a message to associates detailing the future state of the company, a reassurance to the associates of their mission-critical importance, and a clear look at the company’s trajectory, including key milestones and goals along the way. Opdeweegh says, “I’m a true believer in corporate culture as an instrument to guide a company through transformation and change.”

Whether you have taken the bold decision to start your own business or have been tasked with running an existing company, the asset you are managing may well have multiple areas that deserve your special attention. For example, your business may be lacking organic growth, its leadership team may need to be recruited or upgraded, and the organization may require a couple of tangible successes to reinvigorate the team.


Any transformational activity is largely facilitated by a shared corporate culture. According to Opdeweegh, a Miami businessman with over 17 years of experience as CEO, Chairman and Board Member of private and public companies, “Corporate culture plays a critical role in the success of a company. The value and impact of a set of shared beliefs and behaviors can hardly be overstated when convincing a group of people to meticulously undertake a challenging change initiative.”

Opdeweegh cites 6 core behaviors that are very powerful in driving the right strategic initiatives of the organization. He encourages using one or more of these for discussion purposes as you go through the collaborative process of defining your corporate culture.

  1. Creativity: “Think outside the box and share your perspective.”
  2. Customer centricity: “The customer is central to everything we do.”
  3. Empowerment and accountability: “Push decision making down in the organization and hold people accountable.”
  4. Fairness: “Be fair and respectful in everything you do.”
  5. Openness: “Be open and open-minded, listen and allow the best idea to win.”
  6. Speed: “Make quick, analytics-based decisions.”

Opdeweegh uses a definition of corporate culture based on a commonly shared notion that a company’s culture consists of the sum of beliefs and behaviors that determine how associates and management interact with each other inside and outside the workplace, as well as with other relevant constituencies, such as customers, suppliers, the board of directors, lenders and other outside parties. Notes Opdeweegh, “Corporate culture, however, should ideally also extend to the development of a collective perspective on societal and environmental considerations, for instance, the role of the organization in the broader community, or the efforts to minimize a corporation’s carbon footprint.”

Opdeweegh adds that when suggesting a set of core values to the organization, it is important to come forward with values that are highly relevant to the corporation and its success, yet are universal in nature, and impossible to contest. Says Opdeweegh, “Nobody will object to a core value of ‘fairness.’ Nobody will raise their hand to state that they do not believe in ‘creativity.'” He notes that the process of agreeing on the most relevant core values or behaviors for an organization is an iterative and democratic process, with the ultimate end-result coming from many group sessions with a relevant diagonal slice of the company’s associates.

Jozef Opdeweegh: The Advice to Give Someone Assuming A CEO Position

What advice would you give someone assuming their first CEO position?

I would say never, ever compromise on your integrity. Never. Always stay true to your core set of beliefs. I would say focus heavily on instilling a set of core behaviors that you believe in in the organization. I would say be perseverant, because the journey ahead is not going to be an easy one, and there are going to be difficult moments. If you’re going to be the person who’s at the helm of the organization, you’re going to have to wade through those difficult waters. You have to be a hard-working, self-organized independent individual, but you also have to be a fun-loving individual. You have to be an outgoing individual. All of this has to be combined with trying to find the right balance between the corporate life and personal life

Jozef Opdeweegh: The Strength of Corporate Culture

What is the strength of corporate culture?

I’m a true believer in corporate culture. I’m a true believer in corporate culture as an instrument to guide a company through transformation and change. Not everybody may be a believer, but I very much am. I believe that the more daunting the task is, the larger the degree of changes a company has to go through, and the more important corporate culture becomes.

I’ve been CEO of a number of different businesses, some of those startups, where it’s easy to implement your own corporate culture, and some of those inherited businesses of size, where it’s a lot more difficult to impact corporate culture.

Your first couple of days as CEO, regardless of the scenario, should be spent on determining the core behaviors you believe in and establishing the core behaviors everybody can embrace. If you talk about fairness nobody’s going to say, “Hey, I’m opposed to fairness.” If you say inclusiveness, nobody’s going to say that he or she is opposed to inclusiveness. So, there should be sort of universal, almost humanistic principles guiding the way a company is managed.

The strength of corporate culture and core behaviors are the players guiding this organization through its next phase – whether it’s an up-phase or a down-phase. Whenever somebody doesn’t adhere to that corporate culture you don’t have to necessarily address that individual directly, but you can point to the fact that the person is not adhering to the corporate culture that he or she had subscribed to in those first couple of days when you walked in.

That’s the strength of corporate culture: it is a very subtle way of gradually driving behavior. Does it work for everybody? No. Are there people who are ultimately still going to continue to display behaviors that are unacceptable? Absolutely. Should those people be part of your organization in the long run? No, they shouldn’t be.

Jos Opdeweegh: The Importance of Corporate Culture and Team Spirit

How does a strong corporate culture develop team spirit?

The first business I ran that I was a CEO of was essentially a start-up, and so we started with nothing. Well, we started with carried over losses that were quite significant, and we didn’t know if we were going make it to the next year.

What got us through was a tremendous amount of camaraderie, a tremendous amount of team spirit, and a tremendous amount of hard work.

With that, we also had an incredible bond that went way beyond way beyond just corporate life. We were also friends outside work and we did a tremendous number of things with the little free time we had with our families, and that was just an incredible time.

Everybody who was engaged with that company at that point in time still thinks fondly – and this is now 20 years ago – still thinks fondly of those days. You know, it was sort of the Robin Hood mentality…it was wonderful.

Jozef Opdeweegh on the Global Trends Impacting Business and the Economy

What are some of the global trends that are impacting business and the economy? 

There is an ever-increasing importance of populist decision-making on the policy level, and therefore on an economic policy level. Domestically, but also globally, you have populist leaders in the Slovak Republic, Poland and Turkey, but you also of course have a populist leader – a protectionist leader – in the United States.

I, in my heart of hearts, believe that decision-making that is focused on protectionism is ultimately not the right decision making for the long-term future or the medium-term future of the country.

Most economists, I’m certain, would agree with the fact that open economies do better in the long run than closed economies. The whole idea, for instance, of not taking part in the TTIP (Transatlantic Trade and Investment Partnership), which is the decision that our president has made, really is very difficult to understand.

The economy is globally intertwined – there’s nothing we can do about that. If I were to ask you how many people European companies employ in the United States, it would be four million workers. Conversely there are four million American workers, or workers employed by American companies, in the EU.

63 percent of foreign investment in the United States comes out of Europe. TTIP would have allowed for 5% GDP growth in the United States, and it would have allowed for 2 million incremental jobs globally.

It’s just incomprehensible that we’re not part of that.

The Soccer Player and the Formula One Race Car Driver: A tale of odds and good fortune

Sports are often a tool through which we can learn critical life lessons and skills. However, sports teach more than just teamwork and good sportsmanship, it can also provide a lens through which we can view the path to and expectations of CEOs.

On June 14th of this year, the FIFA World Cup will kick off in Russia. The World Cup is the most popular sporting event in the world by quite a distance. It is estimated that more than half of the world’s population consider themselves soccer followers. With more than 4 billion fans worldwide, it dwarfs any other sport in terms of global appeal. Even more impressive, at any given point, there are an estimated number of 265 million active soccer players, which equals about 4% of the world’s population.

Meanwhile, the 2018 Formula One racing season is in full swing. The nexus of speed and technology, exhilaration and excitement, Formula One speaks to the imagination of an ardent and growing fan base. It is also an iconic sport where a very select few have the opportunity to compete for the coveted world title. Each year, no more than 20 drivers are allowed to participate in the Formula One Championship, two drivers for each of the 10 racing teams in F1.

Jos Opdeweegh
Jozef Opdeweegh, CEO

While it may seem surprising, the experiences of a soccer player and race car driver are quite illuminating on the trajectory and journey of CEOs. With nearly two decades of business leadership experience, Jozef Opdeweegh explores the similarities between reaching success in the athletic and business worlds.

Everybody’s game

Many of the world’s greatest soccer players had very humble beginnings. The Brazilian legend, Pele – who is universally recognized as one of the greatest players of all time – was too poor to afford cleats or even a soccer ball growing up. He used to make a ball using his parents’ socks filled with paper to play the game in the streets.

Soccer is a sport with virtually no barriers to entry. It is inexpensive to play. The game can be played on any open patch of grass, sand or concrete. Successful male soccer players range in height from 5 ft 6 to 6 ft 2. No less than 95 percent of the world’s adult male population fit within that range (to contrast this with other sports, professional basketball and American football players for instance require levels of strength and height that exclude over 90 percent of the adult male world population).

Simply put, success on the soccer field is available to almost anyone.

The $8 million price tag of access

Becoming a Formula One driver is no easy feat. In fact, there may be not be a smaller or more elite group of athletes in the world. There is a recommended path for racecar drivers whose ultimate ambition is to end up in the most prestigious of all categories. It typically starts with karting. Those who are very successful at karting may evolve to one of the entry-level racing categories to subsequently try their luck in Formula 3 or 2. Very few ultimately make their way to Formula 1.

Are they the most talented drivers? They most certainly are better drivers than you and I. But what separates them from the pack is a very large wallet. It is estimated the path to a Formula 1 seat comes at a price tag of at least $8 million dollars. And while there are driver traineeship programs to promote very talented youngsters, even those come at a steep monetary price.

Best versus good

To excel at a game with more than 260 million active players and become one of the game’s 50,000 or so professional soccer players, you have to be exceptionally gifted. The sample size is so large that it may be concluded the most successful soccer players are also the most talented soccer players. In a game with universal access and appeal, it is virtually impossible for a hidden gem to go undiscovered. In the world of soccer, “best” truly equals best.

Conversely, while a Formula 1 champion is undeniably a very good driver, he (or she) is almost certainly not the best driver on this planet. Countless are the people out there who unknowingly have tremendous potential as a racecar driver but shall forever remain anonymous. Without the monetary means, they simply will never be given the opportunity to sit behind the wheel of a racecar. In a sport with very high barriers to entry, it is virtually impossible for the biggest gemstone to ever be discovered. “Best” equals (very) good, in Formula 1.

Cleats or a racing seat for the CEO?

The path to becoming a CEO is arguably more akin to the story of the race car driver than it is to tale of the soccer player. Certainly, being a good CEO requires a combination of relevant education, experience and skills to handle the role with success. But good fortune undeniably plays a major role in whether a qualified professional ever gets a shot at the top job. Being in the right place at the right time is very relevant to the opportunity of being selected in your very first CEO position. And once you have been chosen to run a company, you will quickly become a proven commodity and your next job will very likely also be a CEO job.

Much like the race car driver though, there are many people who would make excellent CEOs but never get a chance to demonstrate their talent for running a company. In any organization with a sizable workforce, it is a near certainty that there are one or more employees who are intrinsically better equipped at running the business than their CEO. But despite their efforts and their talent, they don’t rise to the top, often due to office politics, shortfalls in talent recognition and development or a predisposition to recruit outside the organization. Consequently, these professionals often leave the organization to try their luck elsewhere, thus depleting the company’s talent pool.

At social functions or industry conventions, you can’t help but overhear CEOs explaining to their peers how they carefully, step by step, crafted their path to the leadership job. They will lay out in excruciating detail how they realized from a very young age that they were destined for success. Without taking anything away from their professional journey, the reality is that these CEOs simply had a healthy dose of plain luck on their side.

Given this reality, CEOs not only are bestowed with luck but immense responsibility. A responsibility to deliver on their good fortune and hard work through thoughtful leadership, a commitment to doing what’s right and a focus on creating value – for shareholders, employees and the community at large. A rare opportunity to truly make a difference.

Jozef Opdeweegh- Six Factors for a Top-Notch Sales Team

No matter the industry, there seems to be one consistent impetus of enterprise value: growing revenue and cash flow faster than competitors drives a positive impact on the fair market value of the business. However, achieving a superior rate of growth requires putting in place the right talent, culture, and tools for your sales and marketing department.

Tapping into his nearly two decades of business leadership experience, Jozef Opdeweegh shared his view on the key factors that create a top-notch sales and marketing team.


1. Recruitment

As is always the case, human talent is paramount to success. It is hard to overstate the importance of recruiting the right professionals — perseverant and energetic, smart and independent, and most importantly, naturally aligned with the corporate culture and core behaviors. A company’s most valuable asset is its human talent. Talent recruitment and development should, therefore, be at the forefront of its strategic initiatives.

Regrettably, most companies do not spend enough quality time with prospective candidates before offering them a position. The assessment of cultural fit especially requires repeated interaction with a number of team members, placed in different situations and settings.

2. Compensation

Great sales people have unwavering confidence in their ability to sell. They appreciate the opportunity to earn outsized compensation in exchange for truly stellar sales numbers, and consequently, should not require steep base levels of compensation. A compensation structure with a large success-based component will allow you to attract the right sales team, always hungry for the next customer win.

The success of the sales team should not only be measured in terms of new revenue but should also hinge on the profitability of the sale, the overall customer retention levels, and the Net Promoter Score. Furthermore, the variable salary component should be easy to calculate, measure and track. For a new member of the sales team, it may be appropriate and fair to guarantee a floor in terms of variable compensation for the initial stages of his or her employment until he or she has been able to build a book of business.

3. Everybody is a sales person

There is an important cultural component to creating a company that excels in sales and marketing. It is the notion that every single associate is a representative and a sales person for the company. As we are all keenly aware, when a prospective customer interacts with the company, every facet of that interaction can make or break the deal. All associates should live and breathe the concept of customer centricity and embrace the notion that the customer is at the heart of the company’s right to existence.

Handshake business concept

4. Support

In order for a sales team to excel, it requires quality support on a number of levels, including:

  • Effective marketing strategies;
  • A competitive value proposition;
  • Innovative product or service design;
  • Recurring sales training;
  • Accurate daily reporting tools on the most relevant KPIs (key performance indicators).

Additionally, executives play an important supporting role in customer acquisition and retention. In most sales-driven organizations, executives regularly accompany the sales force on its visits to prospective and existing customers. These executives participate to assist in closing the sale or to listen firsthand to the concerns and requirements of the customers with a hard commitment to address these issues expeditiously.

It is a proven best practice to assign a number of key accounts to each executive, even if they are not directly related to sales. In this model, the IT leader, the Chief Legal Officer, and any other executive would be a lead account manager for a number of key accounts – creating greater connection and line of sight between the executive and sales teams. And naturally, the most important business development role is reserved for the CEO, who should spend a significant part of his or her time on sales and account management.

5. Sales playbook

The sales playbook is the translation of the overall sales and marketing strategy, tailored for the individual sales person. It is a prescriptive set of processes and procedures that guide the sales person in his or her daily task of convincing new customers and retaining existing ones, all while preserving or enhancing the contribution margin of the sale. The sales playbook describes the relevant KPIs, the performance against those KPIs, the required numbers of interactions per unit of time with prospective customers, the proportionate time to be spent on customer retention, how to protect gross margin, what the return requirements are on a sale, and many other factors and processes. The sales playbook is an accountability tool that guarantees a consistent approach to business development across the organization and that rolls up to the strategic business development plan of the enterprise.

6. Pipeline measurement

The key to any mature business is forward visibility into revenue and cash flow. A crucial component of that forward visibility is a reliable perspective on new sales, customer churn, and gross margin differences. To that effect, it is recommended that the sales and marketing group, assisted by the financial planning and analysis team, devote the right amount of time and resources on developing a probability-weighted new business pipeline, that analytically maps the quantum and probability of future sales. The process of arriving at a high-quality pipeline is likely an iterative process, where the post factum determination of the accuracy of prior predictions continually feeds into further optimizing the quality of the new business pipeline.

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Jozef Opdeweegh: 5 Aspects of a Steadfast Leadership Style

At certain points in time, running a business will almost certainly feel overwhelming — the loss of a large customer, failure to satisfy contractually agreed upon key performance indicators (KPIs), seemingly unmanageable growing pains, an unhappy shareholder, a contentious board or the departure of a key executive. Countless are the small and larger issues that leaders are confronted with on a daily basis. In order to weather these storms effectively, and still make balanced and informed decisions, it is of utmost importance to remain composed and pragmatic.

Recently, C-suite business leader, Jozef J. Opdeweegh, shared his perspective on how to remain focused and steadfast in times of adversity and turmoil.

Jozef Opdeweegh

1. Anticipate and learn from the inevitable ups and downs of running a business

The success of a business is dependent on an infinite number of factors, some internal and controllable, and even more frustratingly, some external and completely out of your control. Sometimes, you feel you have the wind in the sails, and everything appears to be going your way. The business is growing at a steady pace, your customers are happy, and you are able to attract and retain the right talent. There seems to be an intangible positive energy that is driving the business. Until suddenly, from one day to the next it appears your fortune has changed. You may not be able to put your finger on why things seem to have taken a turn for the worst, but at least in your mind, they most certainly have.

It’s important to remember that both the ups and downs are a natural part of leading a company. Keeping a balanced perspective and appreciating the lessons learned in both the professional peaks and valleys can help leaders emerge from uncertainty with new skills to contribute to their companies.

2. Illusions of causality

All humans, and therefore business leaders included, have a tendency to perceive correlation between completely independent factors. Sure, the adherence to good principles of management in a strong economic environment would typically give your business a boost. However, even during these years of abundance, there always are a number of issues of varying severity that you have to contend with – you just may not notice the impact of these setbacks as distinctively since you are riding the waves of success. After all, you are programmed to believe that you have hit a lucky streak and moreover, that your management talent may very well be the determining factor for your success. It may even cause you to become somewhat immodest and less alert.

Conversely, when the tide turns, and it will inevitably, the same issues that you were able to brush off easily in years prior, now seem to stack up and you may feel you simply can’t get a break. In these moments, leaders must be vigilant that their general mood doesn’t darken and their energy fade to the point of creating a self-fulfilling downward spiral.

Business handshake

3. Dignity in the face of adversity

Consider the following: if you had taken your company public in 2006, you would almost certainly have enjoyed a very successful IPO.  If you had tried the same two years later, at the onset of the great depression with exactly the same company and the same level of profitability, you likely would have failed. You did not cause the great depression. Yet in the first scenario, you would have been considered a wonderful CEO who had done an excellent job for the selling shareholders, whereas in the second example, you may have been cast as a failure.

Shareholders, boards and lenders can be impulsive and impatient. Sure enough, their impatience does not always best serve the long-term interest of the business. But you can’t control the behavior of your shareholders and board. The things you can control are your energy, dedication, core values, perseverance and hard work. While these things may not guarantee fair treatment, they most certainly guarantee dignity and self-respect.

4. Adherence to core values

Whatever the challenges you are confronted with as a leader, you have to stay true to your value system. Your set of core behaviors of fairness, speed, openness, respect, open-mindedness and empowerment should be untouchable. Regardless of the pressures, you should persist in your desire to run a customer-centric, apolitical and meritocratic organization.

Perhaps your board could not care less about fairness and inclusiveness. Or it may be that some of your executives are viewing your focus on the right corporate culture as esoteric modernism that does not serve any tangible purpose. But they are wrong and you are right to stay the course, even when ultimately the conclusion is that the disparate views on culture and core behaviors are incompatible.

5. You are more than the product of the most recent conversation

A good leader listens to well-founded arguments and should always be willing to change his or her opinion based on new insights. The ability to be humble and receptive to fresh insights is a sign of strength and self-confidence. But the requirement to constantly find verbal reassurance of one’s course is a sign of just the opposite.

The leader who always changes his or her opinion and direction based on the most recent conversation is insecure and weak. The CEO who needs to make numerous phone calls to colleagues and acquaintances outside work to find reassurance and guidance is unable to make consistent and quick decisions. Always listen carefully to well-founded arguments but be steadfast in your value system and your approach.

Jozef Opdeweegh

About Jozef:

Opdeweegh has served as CEO for both privately and publically-held companies for more than 17 years in the industries of global technology, distribution, and supply chain optimization. With extensive board membership and experience leading companies across four continents, Opdeweegh possesses deep expertise in global business leadership and management.

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How to build a world-class, third-party logistics business

According to Jozef Opdeweegh, who has been the CEO of three successful global logistics companies, there are 7 core factors that will determine the success of a third-party logistics business.

1. Customer centricity
At the heart of a successful logistics business is a deep understanding of the needs of the customer and an unwavering commitment to address those needs. Inexplicably, many third-party logistics providers appear to be inwardly focused, without the ability to truly empathize with their customers’ requirements. They lack the natural reflex to think outside the box to bring their customers innovative solutions that will allow them to create a distinctive competitive edge.

2. Quality of operations
At its core, a third-party logistics business is tasked with delivering the right part to the right location at the right point in time, while minimizing any product-damage. Key focal points to fulfill the core mission include:

  • Qualified and well-trained personnel
  • Stringent error-proofing techniques
  • Embedded quality control systems
  • Real-time inventory visibility throughout the supply chain
  • Laser focus on continuous improvement
  • Six Sigma with lean manufacturing

3. Turn-key solutions
Customers increasingly want a provider that can successfully handle any type of end-to-end, specialized value-added logistics services. It is essential for a third-party logistics provider to master a vast array of supply chain optimization tasks, while not being too constrained in its service offerings. A provider should ideally develop the know-how to serve all of its customers’ supply chain needs. These run the gamut from the mundane to the very complex, from straightforward full truckload transportation to complex integrated warehousing and product transformation, as well as much more sophisticated, multi-modal solutions.

By providing the customer with a proven, turn-key solution, a logistics provider will greatly simplify the task of the customer’s purchasing community, which will be able to source with one partner, rather than having to piecemeal different facets. This eliminates the problem of ill-delineated boundaries between different providers
and the inevitable finger-pointing in case of quality issues.

4. De-commoditized service offering
The landscape of logistics companies is very competitive with a direct correlation between the complexity of the task and the number of market participants.
In order to differentiate itself from competitors, a logistics provider should focus on services that are complex and mission-critical to the success of its customers. It is important to crawl up the value chain and embrace complex value chain challenges.

By being a reliable provider that embraces challenges few others will touch, a logistics company puts up barriers to entry, increases switching costs, and enhances the stickiness of the customer base. This is not a suggestion to solely focus on the very sophisticated, but rather to make those mission-critical tasks the heart of an integrated service offering.

5. Pricing
The ability of a logistics provider to master integrated and sophisticated supply chain optimization results in a micro environment with a smaller group of competitors. This should lead to the negotiation of more favorable contractual terms and more attractive margin potential. From the perspective of the logistics provider, the key elements to focus on during contract negotiations are the following:

      • Clarity on scope of service.
        Have a very detailed description of the service offering to minimize future questions about what is inside or outside the contract scope.
      • Duration of the contract
        Longer contract terms provide a sustainable cash-flow profile and allow the logistics provider to invest in innovative technology to better support the customer demands with a long-term view.
      • Protection against fixed costs

    Build in protection, either in the form of a non-volume related reimbursement for fixed costs, or a variable reimbursement per relevant unit of measurement that increases if the handled volume decreases.

  • Performance indicators that are clear and measurable
    Relevant KPIs are customer dependent but would include: (1) number of errors, expressed as a fraction of the number of opportunities to make an error (short, over, damaged), (2) on-time delivery, (3) truck turnaround time, (4) labor efficiency and more.

6. Information technology
In order to effectively run a logistics organization, it is paramount that the company has real-time global inventory visibility to know exactly where different SKUs are stocked. A global logistics company may handle and aggregate millions of SKUs in its warehouses. Without providing access to real-time inventory information, a third-party logistics company cannot satisfy the demands of its discerning customers. Equally, it will not be able to provide meaningful reporting on the KPIs that are relevant to the customer and that have been agreed to in the service contract.

7. Agility
A successful logistics business can swiftly adapt to changing customer needs, rush orders, seasonal demand, and related peaks in volume. Maintaining the requisite agility requires the provider’s back office to be versatile and capable, yet nimble. By virtue of their business model, third-party logistics businesses manage geographically dispersed warehouses, so it is critical to develop a standardized operating system to guarantee a consistent customer experience across the network. Hand in glove with this is the need to build a fully scalable support infrastructure that can be adjusted up and down based on volume requirements.



About Jozef:

Jozef Opdeweegh, also known as Jos, has served as CEO for over 17 years of global technology, distribution, and supply chain optimization companies with 5,000 to 20,000 employees, public or privately held. Opdeweegh has extensive board membership experience on 4 continents with related and unrelated companies.


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