What makes a logistics provider stand out in a tender process these days?
I find this a fascinating subject when talking to both logistics companies and buyers of freight.
How not to stand out in a tender
These are, of course, core components of a credible logistics offer; but aren’t these traits offered by many logistics companies that receive an invitation to tender? And what of this so-called added value and innovation?
I have asked countless freight companies to expand on how they add value to a customer’s business or what innovation they truly offer and often the response is underwhelming. Delve a little deeper and one will find that there is certainly very little offered that could be considered fresh and innovative.
Many buyers of freight and logistics services share this view. In recent conversations with some prominent retailers, it has become apparent that there is a degree of lethargy on this subject, so much so that many lack the energy to go through a tendering process. This is despite the fact that they freely admit that their supply chains lack innovation. Indeed, there appears to be a reluctant acceptance that nowadays no one stands out from the crowd.
So what can a logistics provider do to really stand out?
Well, it’s no surprise that the answer, to a large degree, is in technology. Indeed, technology deployed in an innovative way can absolutely make the difference at a time when competitive pricing, global representation and purchase order/shipment tracking are considered core competencies that are difficult to distinguish from one provider to another.
Innovative technology in supply chain and logistics
So what is innovative technology in the logistics world? Here are just a few tasters:
This is something that eludes most mainstream logistics companies whose software solutions tend to rely on manual updates and validation checks to monitor events along a linear supply chain, often involving corrective action on late and conflicting data inputs (i.e. which eta is the correct one?).
The fact is, none of these solutions offer true real-time visibility. And what does that mean? It means customers cannot rely on knowing what’s happening in their supply chain at any given stage on a 24/7 basis, which is why there is still virtually no take up of mobile device usage for supply chain visibility. Everybody waits for the next day, the next week and, indeed, the next month to hone in on what’s really going on in their supply chain.
Connectivity on a global scale
Many logistics companies are shunning the opportunity to connect their systems to carriers, airlines, port authorities and other supply chain partners that offer vital data affecting customers’ orders, shipments and inventories. The level of integration in a typical supply chain is mostly limited to a single logistics provider’s proprietary software, with connectivity encompassing not much more than vendor online cargo bookings.
The result is that data rarely originates from source and by missing the opportunity to create a seamless, connected global supply chain, perpetual performance improvement and accountability are lost.
Visibility into supply chain costs
When customers issue an RFI they are often promised great riches from logistics companies’ visibility systems, such as access to actual freight cost audits as well as estimated and landed cost calculators. However, rarely do these systems live up to expectations and many customers continue to use complex and time consuming spreadsheets to manage their supply chain costs with historically downloaded data.
In summary, these are just three examples where technology can make huge advancements and if a logistics provider focuses on adopting software that innovates in these and other areas, they will surely set themselves apart from their competitors and stand out from the crowd.
Danny Clayton is Managing Director of Droptop Supply Chain Solutions and a guest blogger for Gravity. www.droptopsolutions.com.