Client Embed Programs: The Key to Holistic Logistics Optimization

By
Productiv

According to a 2023 MHI and Deloitte survey of supply chain leaders, hiring and retaining qualified workers and navigating the talent shortage were the two top supply chain challenges, with 57% and 56%, respectively, of respondents citing these concerns.

Unfortunately, labor shortages can keep companies in a constant state of scrambling for workers while limiting their potential to optimize logistics. Some resort to unskilled or unreliable temporary help sourced from staffing agencies, but this often creates silos of labor, making it challenging to integrate workers with an overarching logistics strategy. Looking for better solutions to this challenge, many companies are turning to Client Embed Programs (CEPs) as a strategic approach to sourcing skilled labor and optimizing logistics.

What is a Client Embed Program (CEP)?

A Client Embed Program is a service where a 3PL places its own trained and specialized employees within its client’s facilities, warehouses, or operations. Workers are on-site, often working alongside company employees, with an operations manager and supervisor also on-site managing these workers. Because these embedded employees have outside training, they bring specialized knowledge that can be particularly beneficial when the company is lacking certain expertise or wants to optimize its logistics.

In addition to tapping into specialized knowledge, CEPs also offer the benefits of:

Flexibility – Embedding 3PL workers can give a business the flexibility to scale operations up or down based on demand, without the long-term commitment of hiring or the complications of layoffs.

Cost Efficiency – By relying on the 3PL's expertise, resources, and fixed-cost model, businesses can often reduce labor costs, improve productivity, and decrease inefficiencies, as the 3PL is in charge of meeting the output goals even if it means they pay for the overtime to do so. This can lead to opportunities like warehouse or inventory optimization in the retail industry.

Technology Integration – While the 3PL works within the client’s systems on the manufacturing floor, in the warehouse, they can bring in technology solutions for logistics management, like Order Management (OMS) and Warehouse Management (WMS) systems. They can integrate these solutions into the business’s operations, facilitating better workflows like inventory tracking and data analysis.

Logistics Optimization – CEPs bring the opportunity to continually assess, refine, and improve production, warehousing and logistics in real time. This allows for a more agile response to any challenges or inefficiencies that arise. Instead of relaying information back and forth between separate teams, embedded workers can quickly make adjustments on-site. This improves the speed and efficiency of the logistical operations while ensuring a smoother and more integrated experience for the client, leading to consistent improvements in supply chain performance.

What Challenges Can CEPs Solve?

Client Embed Programs can address a range of operational challenges by merging expertise and labor to improve productivity, quality, and efficiency. Some of the biggest challenges CEPs can tackle include:

  • Production Schedule Failures – The unreliability of temporary labor can affect production outputs, as insufficient staffing often leads to production bottlenecks and unmet schedules.
  • High Turnover – A common issue in many manufacturing setups, high turnover keeps companies constantly hiring and training new workers, disrupting their ability to optimize their logistics.
  • Rising Labor Costs – The current economic landscape has thrown businesses the challenge of increasing wages and inflation rates, adding to their operational expenses.
  • Quality Control – Ensuring consistent product quality becomes increasingly challenging when there's high employee turnover. The constant training of new workers can lead to problems in product outputs.

What’s the Difference Between a Client Embed Program and a Staffing Agency?

Employing a Client Embed Program and using a staffing agency might sound like similar options, but when they’re compared side-by-side, there are major differences that make CEPs the better choice for many businesses.

Staffing Agency Client Embed Program Flexibility & Integration Primarily provides temporary workers. The hiring business is responsible for scheduling, forecasting, and training these workers. Offers various flexible solutions, like managing specific assembly lines, managing the entire packaging operation, or setting up short-term or long-term operations on-site or at a new location. Cost Predictability & Risk Costs are based on hours worked, not output. This can make it harder to predict overall costs, especially if there are inefficiencies or slowdowns. Costs are known upfront according to the cost-per-unit. All risks related to managing labor are shifted to the 3PL. Training & Quality Assurance The hiring business is responsible for training temps, which can be costly, and temporary workers might not have a vested interest in the quality or throughput of the work. Workers from the 3PL are trained and incentivized based on quality, and the 3PL guarantees the quality of the work. This ensures better and more consistent output. Managerial Overhead Managers might spend a significant amount of time on staffing issues related to temporary workers. The managerial burden is reduced as the 3PL takes on the responsibility of managing their embedded workers. This allows business managers to focus on core operations and other areas that drive the business forward. Throughput No incentive to focus on throughput. Staffing agency revenue is higher if efficiency is lower due to need for more workers and longer hours. Aligned incentives as the 3PL only invoices for first quality output and is only profitable when output efficiency overcomes fixed unit cost.

Collaboration is Vital to CEPs

The biggest differences between CEPs and a staffing agency can be summed up as simply having better collaboration toward a common goal -aligned incentives. Collaboration leads to powerful partnerships between logistics providers and their clients because both are actively working together to understand and fulfill operational needs. The result is tailored solutions that are specifically designed for the client's requirements. This might involve any of the following value-added services:

Then, for the warehouse side, by integrating solutions like WMSs, OMSs, and inventory control systems, these clients get streamlined, technology-driven logistics that operate with accuracy and efficiency. Finally, by adding in a highly qualified workforce, clients get operational reliability on top of it all.

How CEPs Lead to Holistic Logistics Optimization

Both the client and the 3PL are working toward logistics optimization, and every piece of Client Embed Programs mentioned so far can help support this goal through whole-chain efficiency and flexibility that leads to a better customer experience.

1. With a CEP, Companies Maximize Their Whole-Chain Efficiency

CEPs streamline operations from start to finish. By embedding reliable workers within a client's operations, CEPs help drive efficiency, bringing all elements of a supply chain to work together. The goal is to improve performance and find opportunities to reduce operational costs. Efficient resource allocation is central to this, ensuring that every aspect of the logistics process, from warehousing to delivery, is optimized for time and costs.

2. With a CEP, Companies Receive the Support of Flexible Services

CEPs are built for flexibility, enabling 3PLs and clients to address multifaceted logistics challenges. Whether it's the complexities of unique products or the demands of inventory management or order fulfillment, CEPs can get solutions tailored for any challenge. Utilizing a combination of technology and expertise, these programs support clients in turning ideas and opportunities into competitive advantages.

3. With a CEP, Companies Improve the Customer Experience and Customer Satisfaction

In optimizing the logistics operations, CEPs ensure that customers receive their orders fast and accurately to improve customer satisfaction. The logistics process has a significant role in the customer experience. They may not recognize what went into the process, but they remember that it was a positive experience when every step from order placement to unboxing went smoothly.

Get Productiv for the Next Level of Logistics Optimization

Whether your company is facing capacity constraints, difficulty keeping up with sales demand, late and mis-shipped orders, or you simply recognize that there is an opportunity for logistics optimization, Productiv’s Client Embed Program can help your business reach its goals, goals we take on as our own.

Along the way, Productiv delivers on our goal of 99% on-time, 99% accurate, and 99% inventory control. With flexible labor, cost transparency, custom solutions, and integrated technology, you get the expertise and reliability to focus on your business, while we handle the logistics.

To learn more, contact Productiv today.

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