The first quarter of the year often sees a trend of retailers reviewing their supply chains and logistics providers.
The busy peak has passed and there’s opportunity to look at what did and didn’t work during the Black Friday and Christmas rush, as well as during the spike in January returns.
If you’re looking for a logistics partner who can deliver peak performance, here’s five key questions to ask:
1) Does the logistics company develop their own supply chain software?
This is a killer question and should be top of the procurement agenda. Every omni-channel supply chain is different, with fast-changing variations influenced by sourcing, customer demands, product dimensions, strategic goals, operating costs, and margins – and many more factors. Bespoke software can help to properly address these nuances to deliver a truly agile supply chain management strategy, and one that can flex and scale as operations change and grow.
Advanced Supply Chain has a specialist in-house team of IT experts who develop our own award-winning supply chain software. They can develop and adapt software according to the goals or challenges that a retailer is facing, rather than being confined by the limitations of an off-the-shelf software package. Our view is, if the logistics partner doesn’t develop their own software, there may be restrictions in terms of capabilities, as well as delays when changes are required or problems occur, and quick corrective action is critical.
2) What’s the logistics provider’s warehousing and fulfilment footprint?
The location of warehouse and fulfilment centres can prove the difference when it comes to Just-in-Time (JIT) inventory management, and the processing of customer returns. Strategically located centres can help to make the nearshoring of stock a reality to improve efficiencies and reduce lead times. Location is also increasingly critical for handling returns close to the point of sale, which can speed-up the whole process to better protect customer experience and satisfaction, while also reducing costs and carbon emissions.
Along with location, retailers should also consider the capacity of a supply chain partner’s warehousing and fulfilment centres. Will they be able to accommodate expansion of omni-channel supply chains and spikes in orders?
Advanced has recently invested £60million in opening a European operating facility in Nettetal, Germany. It’s perfectly positioned to serve markets across Europe, providing retailers with access to a range of value-added services covering pre-retail, returns processing, fulfilment, wholesale distribution, and transportation.
3) Can the provider streamline inbound logistics?
Improving inbound logistics is becoming more and more important for retailers. Many are diversifying stock inventory and increasing the numbers of suppliers they work with to spread risk and strengthen margins. However, this can create complexities, with products arriving at warehouses from many different suppliers in varying different formats. It can lead to inconsistencies in processes, packaging, and labelling, which risks errors and proves unnecessarily time-consuming to manage.
Retailers are best placed asking supply chain partners about their Nominated Carrier Scheme (NCS) capabilities. A well-run scheme, backed-up with capable IT systems and transport management systems can effectively automate inbound logistics. Supplier compliance and compliant inbound deliveries can be achieved to drive consistencies and reduce the risk of errors and the amount of time spent correcting mistakes. Automation compliance can also be established and improved, minimising touchpoints to move goods faster through warehouses and eliminating the threat of bottlenecks. Retailers can also benefit from enhanced tracking and transparency to support overall stock inventory management and availability.
4) Can the 3PL do more than fix peak problems to create new opportunities?
A post-peak review of supply chain partners will often start with problem solving. Retailers tend to approach Advanced, eager to fix specific issues they’ve just experienced elsewhere during a busy period, so they are fully prepared to capitalise on the next spike in sales. This is a good starting point for procurement, but reviews and briefs should stretch beyond addressing prescriptive problems by challenging a prospective 3PL provider to demonstrate their full experience and expertise.
Innovative, tech-led supply chain partners with global capabilities will be able to draw on a wealth of knowledge and insight to identify supply chain opportunities that aren’t within a retailer’s remit to know about. As well as addressing the problems a retailer puts to them, the logistics partner will be able to review end-to-end supply chain operations to find new efficiencies and processes that truly optimise performance. This could help reduce margin dilution, make operations quicker and improve overall circularity.
5) is the logistics provider data driven?
Accurate and accessible supply chain data sits at the heart of everything that makes a successful supply chain tick. With the right data, logistics providers can identify solutions for making supply chains more efficient and more sustainable. For example, they can strip out transportation mileage and find ways of maximising cube optimisation.
Data is also fundamental for achieving end-to-end supply chain visibility. Rich, reliable information is needed to make informed decisions about stock inventory management and to minimise margin dilution. This impacts stock availability, RSPs and delivery timescales, which all can all influence sales, customer satisfaction and brand loyalty.
Retailers should focus on understanding what software and systems will be in place to give them a ‘control tower view’ of their supply chain. They need to ensure that the control tower is communicating with all the different parts of the chain, from sourcing through to point of sale and return, and that information and reports are readily available to inform decision making.
If you’re reviewing your logistics provider and are keen to find a partner who can deliver peak performance, get in touch here to speak with one of our team.