Logistics Information

How to choose a logistics provider

Supply-LINQ views a logistics services contract as a partnership where both parties can gain from the relationship.

  • Contract should be an 'arrangement' or an 'alliance', not an agreement between opposing forces.
  • It must be a win-win situation.

There is some criticism that many logistics providers have a 'cost plus' mentality. After initial 'one off' savings the customer rarely gets cost decreases. This may also be the result of:

  • inadequate or poor contracts
  • commodity mentality of customers
  • 'lowest price' initial tender process where the task is unclear
  • the information provided is inadequate or incorrect

In contrast, some of Supply-LINQ's customers have contracts where there is gain sharing against productivity benchmarks. As productivity increases there is a mechanism where the customer obtains a reduction in rates, where some of the saving is given to Supply-LINQ. This is a win-win for both parties. There is an incentive to improve productivity. The Supply-LINQ approach is to capture the true underlying costs of providing the service and establish a rate structure that mirrors these costs.

Some of the points of friction between providers and customers are the result of:-

  • Information provided by the customer is incomplete or inaccurate
  • Customer or provider is taken over
  • Management structure or management personnel change
  • Expectations change or are unclear
  • Poor performance by the provider
  • Customer complaints
  • The logistics task changes significantly

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