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Can Uber style companies beat a dedicated 3PL in overall value?

January 26, 2018

Today there are a multitude of 3PL options, especially for last mile delivery.  While technology, hours of service, and service area are all ways to differentiate between companies, the most basic difference between firms is weather or not they specialize in a certain client sector.  In the broad sense this means companies that service all types of industries versus companies that specialize in a specific segment, and for the purposes of this article examining a medical courier juxtaposed to a generic courier.  In other words, could a medical 3PL offer the same level of service as an Uber style of company.

 

Best Practices

 

Is there a difference in best practices between medical 3PLs and Generic 3PLs?  On the surface it would appear not.  Both would adhere to a standard the requires on time service, and both would profess a certain level of customer service expertise.  Looking deeper however, one can see there is a large divide between adhering to time requirements and completing service successfully.  In the process of delivering consumer goods, for example, a courier would not need to worry about temperature requirements or DOT regulations for hazardous materials.  While a blood sample must be maintained at strict temperature requirements along with documentation and chain of custody records.

 

This speaks to a deeper disparity between molds, the training and orientation of the courier.  A generic firm would complete generic training.  Their couriers would be versatile in consumer goods, business documents, or perhaps foodstuffs.  None of which provides the particulars of handling a clinical sample or patient records.  It is in fact dangerous to see all deliveries as equal, because in that sense all deliveries receive the lowest common denominator of handling and attention.

 

Regulatory compliance is a must for all couriers however a medical courier has the added need to comply with HIPAA.  There is no government certifying agency for HIPAA compliance.  The Office for Civil Rights (OCR) enforces the law but does not in fact certify compliance ahead of a complaint or review.  Every courier has the duty to create and maintain its own standards, whether that be utilizing a third party or in-house solutions.  One could see a great attention to compliance for those in the medical field as they are governed by HIPAA much more than a generic courier.  In fact, one might assume that while every driver for a medical courier is well versed in HIPAA, not every driver in a generic courier fleet is.  Beyond HIPAA, CLEA and CLEO needs must be considered, with special attention paid to temperature control and chain of custody records.

 

Equipment

 

Speaking of handling, the equipment needed to provide best in class service to medical needs is a far cry from the equipment for general courier work.  For example, to transport legal papers all it takes is a messenger bag.  While retrieving a clinical sample requires a specialized cooler (cannot be used for other items to prevent cross contamination), temperature probe, DOT and OSHA compliance signage, etc. 

 

 

Furthermore, the courier must be able to use all the required equipment with high proficiency.  Simply sticking the gear in a van is not the same as dutiful orientation process and in field experience.  Going back to the example of a legal document delivery, if that courier is tasked with picking up clinical samples after completing the document order, he or she now must switch gears both in equipment and mindset.  That is difficult on a good day, and doubly so if time is short to complete the delivery.  This concept is seen daily in factories across the globe, as specialized labor produces higher and more consistent volume of work than other methods.

 

Service

 

Service is defined by two measures; availability and consistency.  Today’s world demands 24/7/365 service availability, and anything less isn’t considered professional.  One size does not fit all, so multiple service options must also be available.  Daily scheduled work, routes, and on demand orders must flow seamlessly together to provide the lowest cost and highest satisfaction to the customer.  The ability to utilize service as a cost reduction method is unavailable to a generic courier because not all drivers can handle all orders, and often the synergy amongst fleets does not exist to provide the most efficient or consistent service coverage.   

 

Additionally, service at midnight on a Sunday must produce the same satisfactory results as service performed on a Tuesday at noon.  The key to consistency is dedication and repetition.  A courier must know key details of the client, such as desired pick up procedures, typical daily volume, and packaging expectations.  Knowledge of client specifics cannot be gained by occasional service or the assignment of drivers ad hoc, rather the courier needs specific orientation and experience with said client and dialy interaction.

 

Technology/Data Analytics

 

Technology allows for service to be completed in the most accurate, transparent way.  Additionally, it also allows for data gathering and analytics that further help provide the most efficient (and lowest cost) service possible. Currently, most to end providers will have real time tracking, GPS, and signature capture.

 

A generic courier will probably tout best in class technology that services all of it’s clients. Again, a one size fits all option is not ideal for the medical environment.  GPS tracking is good, but there is also the need to track each sample for chain of custody requirements.  Barcode scanning, RFID tracking, etc. is required to provide both the transparency and the documentation needed for highly sensitive deliveries. 

 

Once the delivery has been completed, the data from that service must be analyzed for improvement possibilities as well as client insights.  Does a grocery store delivery need the same insights as a diagnostic laboratory?  Is a hospital’s supply chain the same as a department store?  Clearly the answer is no, and it should be expected that the analytics typically used for non-medical clients are not sufficient for the medical industry.

 

Continuous Improvement

 

All the above areas require constant innovation and strategic learning.  Regulations change quickly, along with advances in technology and other areas.  A generic courier cannot hope to keep abreast of all the nuances.  Last year alone the diagnostic industry saw one of the biggest changes in the past 10 years in PAMA as well as significant legislative changes to healthcare overall.  CLEA/COLA release semi-annual updates that must be understood for compliance as well.  A specialized firm will be much more thorough and timely in updating their practices to keep within tolerances.

 

Conclusion

 

To summarize, a generic courier cannot provide all the aspects of service to a medical client (or any specialized industry) at the same level as a 3PL that focuses on a specific market segment.  Through dedicated service best practices, ongoing education and training, better understanding of client needs, and robust regulatory compliance, a committed 3PL will provide better overall value.

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