With over 50% of warehousing and over 70% of transport outsourced, it is vital to your success that your logistics contractors are adding real value to your organisation. Too often however, clients express disappointment as to the contribution that their logistics service providers make in their quest for competitive advantage. So how do you ensure that your logistics service providers are playing their part in helping you achieve competitive advantage.
- The very first step is to ensure that what was promised is being delivered. All too often clients fail to hold contractors to account with regards to service quality, productivity, reporting or commitment to continuous improvement.
- In some cases contractors account management is very good at monitoring the performance of the service provided. Where it is not, either insist on better account management or accept the need to have one of your own team actively monitor and liaise with the contractor. Unfortunately for some contractors the service you are given depends purely on what you demand. You have to be realistic.
- It is essential that regular reviews take place with senior management so that concerns can be shared, strategic plans discussed and new opportunities identified. This requires a commitment by both parties.
- Whilst it is right to be demanding, clients need to be realistic as to what they can expect within the price they are paying. Competition has forced margins down so that many contractors simply cannot afford the resources necessary to deliver on all of their promises to all of their customers. An honest discussion as to what can be expected is the first step towards the parties agreeing how new ways of working can be developed and implemented.
- Where a commercial agreement is no longer fit for purpose, it may be necessary to prepare a revised document that more closely reflects current reality and is fair to both parties. There is no point in continually reporting against targets that are no longer meaningful.
- In the final event, where it is clear that your contractor is no longer a good strategic fit, it is better to make the necessary changes rather than persevere with a supplier that is unable to satisfy your changed requirements.
If you would like help in setting realistic expectations or reviewing your relationship with your logistics suppliers then Davies and Robson can help. We have a wide and long experience in Contractor management as well as in all aspects of Logistics Outsourcing. Call us on 01327 349090
