one blue light special you'll want to avoid

The "Blue Light Special" that grabbed headlines in late October had nothing to do with a limited-time sale on undergarments or half-price Halloween candy. The blue lights in this case were flashing atop law enforcement vehicles as federal investigators converged on Wal-Mart stores across the country to arrest more than 300 undocumented workers. The action, "Operation Rollback," was part of the federal government's wide-ranging crackdown on illegal aliens and undocumented workers, which has intensified in the post-9/11 world.

Although investigators seized several boxes of documents from the company's world headquarters on the night the raids were carried out,Wal-Mart spokesmen say most of the workers arrested were not company employees, but rather employees of outside cleaning services hired by local store managers. The company insists that it was entirely unaware that the workers who mopped store aisles in 21 states might be illegal aliens. In the aftermath, however, Wal-Mart says it plans to review the status of all of its 1.1 million employees to be sure it doesn't have any "illegals" on the payroll.

It's hard to imagine that a business like Wal-Mart, which works hard to cultivate its image as a business "Made in America," would deliberately hire illegal aliens to sweep floors and empty trash. But ignorance is never an acceptable defense. Contractors are an extension of your company; their actions are a reflection of the businesses that hire them.

Certainly, the federal sting operation serves as a wake-up call for every logistics professional out there. The outsourcing of logistics activities—from the provision of transportation services to distribution center operation—has become everyday practice. But when you hire a third-party logistics service provider (3PL) to handle all or part of your company's logistics operations, you can't just sign the contract, walk away, and assume that all is well and will remain that way. Your job is to monitor the 3PL's activities to make sure it lives up to expectations. That's not just a matter of making sure that the people the 3PL hires on your behalf are "legal." It's also a matter of making sure you know exactly how your thirdparty vendor handles important functions for your business.

Nowhere is this more important than in logistics. Logistics is perhaps one of the most "customer-facing" aspects of any company's business. When you outsource logistics activities to a third-party provider, you're outsourcing much more than the hauling of a load from Cincinnati to Dayton. You're entrusting someone to represent your company out in the world. Like it or not, your customers will judge you by the behavior of the driver who shows up at their dock or the distribution center service reps who answer their questions and solve their problems.

The recent raids at Wal- Mart will not halt the explosive growth of outsourcing. In the logistics field, outsourcing already represents the fastest-growing segment of the business. Some studies predict that logistics outsourcing will more than double in the next three to five years.

How well those outsourcing arrangements pan out will largely depend on how well they're managed by the company that's paying the bill. If the Wal-Mart news does nothing else, it reminds us of this essential truth: It's your job to make sure your outsourcing contractor is above board and delivers on its part of the bargain. If you don't, you could find yourself the target of the next "blue light special."