18 Feb Overcoming critical moments: how to value your logistics operator
When everything works and there are no problems, they are not usually the moments when one makes the assessment of the services of their suppliers, but in difficult situations, it is where the differences in service are really marked. When the slope begins to steep up is when those who are prepared, have the knowledge and adequate means mark the true differences, is what we later call “differential value” of the service. (logistics)
The transport and logistics sector is no stranger to moments of difficulty; each one of them has its peculiarities so we can not transfer the generalized opinion that they are the same, they do not have the same problems, nor are the difficulties or critical moments different in both form and time.
Logistics in recent years is having an increasing weight not only in the most common business sectors such as automotive or industry, but the emergence of electronic commerce has generated new management cycles, with the same requirement in terms of the level of service as the industry, but with a higher level of pressure. E-commerce is tightening the supply chain with its time demands, making the time allocated to picking, order preparation or stock control increasingly smaller, as evidenced by the recent news about Amazon and its total “control” over the employees, getting to parameterize the steps they take, the units that they remove from the shelves, the number of orders managed, even the time they make rest ….
As each failure in the logistic management can suppose a breach of the service to the final client, we are going to determine the most critical moments and situations for a logistic operator, that are the ones that will determine and mark the difference of the service.
Stock Control vs. Stock Break
This is a classic, the logistics operator tells the customer that he has no more stock and cannot serve the customer orders. Behind this situation, there are several problems, but there are 2 that stand out:
1-Lack of SGA or control program by the logistics operator
2-Lack of a specific SOP with the client
The first is the clearest, many operators do not have a powerful SGA that allows you to parameterize all the necessary aspects, create alarms, control levels of rotation, etc; but the most important is the second one, it must be determined BEFORE starting the logistical work which is the procedure, and delimit the minimum level below which is considered stock breakage. If you work with logistics operators, you should ask yourself if you have this aspect clearly defined with your operator, what are the forms of communication and reaction times, you play your client fail …
Control of physical inventory
Second classic, do you know how much merchandise you have stored? How fast can you get that data? What is the “reliability of the data? And what is the “age” of the data?
It is clear that stock is synonymous with money, a poorly controlled stock means losing money, either by being immobilized or because you do not know how many items and materials you have stored in the logistics operator. Stock control or inventory control is possibly one of the most invisible jobs offered by a logistics operator, but it is one of the most vital since a lack of control over it has a direct consequence in the income statement.
As a customer, we must evaluate a logistics operator if he has correct inventory management, if we can access the inventory data quickly, directly and efficiently, and of course, that it is a reliable system. The most powerful logistics operators have some SGA or stock control programs that allows online and on-time control and management, and this last part is very important since a correct control of inventory together with a good program of control of situations, will avoid in a very high percentage, inventory problems such as breakages by stock or differences in products. This point must be very well studied when evaluating your logistics provider because not doing so can mean losing money.
Incident management and contingency plans
Once controlled the inventory that we have in our logistics operator, and controlled the movements of this stock, the next part would be to establish a contingency plan before the different incidents that could occur during the logistics processes. We must be clear that by any means that we put, 100% effectiveness will not be achieved, we work to be as close as possible to that figure but we must determine what to do when we have a problem in our logistics operations.
It is important to create a contingency plan, it will help us to first detect what problems can happen to us more repeatedly, and establish what we must do at that time, as well as a subsequent evaluation in case that error was not produced in the logistics operator, and that can be solved for future cases (boxes that arrive already badly labeled to the logistics operator, etc.) The logistics operators are normally able to get ahead of the client at this point, the experience makes them able to extrapolate similar situations, and be able to determine with the client the solutions that can be carried forward; for this it is vital to establish this contingency plan to determine the steps and forms of communication, there is no worse situation than a crisis in which you do not know what to do, time is usually gold! Here you must also value the experience of the operator logistics and its personnel, often occur unscheduled or unforeseen situations, which is where the value of the staff and their professionalism play a decisive role. When you make an assessment of your operator, study with what type of clients you work, what personnel you have and the experience you provide, it is usually an intangible value that will determine a good service.
There are many more cases where you can determine and value a logistics operator, but these 3 aspects are possibly the most essential, the basic to know if your logistics partner is up to the needs of your company. The logistics partner is an important part of their customers, they are part of the company for which they provide the service, so it must be a reliable partner, an empty warehouse has almost any transport or logistics company, but with an SGA or program of management and control there are fewer; and with qualified personnel even less…