Choosing A Logistics Partner? 4 Critical Aspects To Consider

Working with a supply chain partner increases efficiency and decreases production costs. Moreover, it helps deliver a product that exceeds customer expectations.

Since a third-party supplier is better equipped with the tools and technologies for managing supply chains, they’re better positioned to adapt to changing market conditions and consumer preferences.

Effective collaboration requires your organization to share information in real-time. Transparency and cooperation can be hard to execute, but it’s worth the effort.

Selecting the right partner as a logistics provider is paramount. Making the correct choice means so much more than short-term gains. It’s an investment in the success of your business.

After choosing the right supply chain partner, it’s essential to have a fit-for-purpose contract that highlights the service-level agreement, KPIs, and account management structure.

Here Are 4 Crucial Points To Consider When Choosing A Supply Chain Partner:

Below are the key factors to consider when reviewing partners for your project.

1. Determine How Well Your Partner Can Realign and Reroute

One of the most significant challenges you’ll face is managing shifting priorities. Certain factors are out of your control regardless of how closely you manage a project. This could be a last-minute client request or changing legislation.

Either way, this demands a great capacity to adapt and react immediately to issues arising in routes, volume, shipments, and deliveries. A big company has a broader range of experts, but a small one has the advantage of flexibility.

Disruptions to the global supply chain will continue in the following years. The COVID-19 pandemic has tested leaders’ global resilience, flexibility, and ingenuity.

Smaller service providers have a resource pool that is often overlooked. The solutions they offer are unmatched by even the largest companies. Bigger isn’t necessarily better. If business expansion is your primary goal, you need all the help you can get.

Your supply chain partner should be ready to adjust resources if the demand drops or skyrockets. They should be able to demonstrate past proficiency at your volume. If not, you should walk away from the negotiation table. Supply chain operations should be a lever for growth.

2. Take Into Account Technological Compatibility

Compatibility between supply chain partners’ technological systems matters. In highly competitive business environments, it’s necessary to integrate and share resources and capabilities with upstream and downstream supply chain partners to attain the desired results.

Over the years, logistics providers have developed proprietary technologies to manage transportation, vendors, suppliers, and inventory efficiently. It’s up to you to ensure that the technology tools can be integrated with your ERP software.

A successful company stands out by seizing opportunities and overcoming challenges. Compatibility of supply chain management efforts boosts organizational performance.

Technological compatibility is composed of several dimensions, which can be distinguished based on their level of complexity. At a time of fierce global competition, the achievement is a matter of paramount concern.

Technology is a source of competitive advantage. Implementation should be fast and inexpensive as compared to other means of automation. It’s believed that by 2026, supply chain management applications will rely on advanced analytics, artificial intelligence, and data science.

Supply chain complexity continues to increase, so enterprises have to become more agile, emphasizing quick, efficient, and continuous decision-making.

3. See If They’re Willing to Discuss Tailor-Made Solutions

Customers shape the new era of globalization. Your business has to effectively and efficiently create superior value for customers. The performance of the supply chain has a significant impact on customer satisfaction.

You must deliver the product to the customer at the right place, at the right time, in the correct quantity, and at the right price. Your organization will surely benefit from a tailor-made supply chain solution.

This is the only company with your unique set of processes, so you need a comprehensive solution. When choosing a supply chain partner, ask their willingness to develop tailor-made solutions.

You can enhance efficiency and create uplifting customer experiences with a customized solution. According to Broekman Logistics, there’s no one-size-fits-all approach to logistics, technology, and sustainability.

The delivery of pharmaceutical products can’t be treated the same way as the delivery of clothing items. Each industry is different, and so is every consumer.

Put simply; it would be a mistake for the logistics provider to depend on familiar tools and methods to address issues in the same way without considering all the factors that come into play. The supply chain service provider should adapt their offering to meet your needs.

4. Measure All Forms of Communication

Communication between stakeholders, suppliers, and your internal teams is paramount. The problem is that most companies don’t have strong communication channels.

Lack of communication can result in missed opportunities, poor inventory management, damaged client relationships, and loss of revenue, to name a few. Clear communication is, therefore, an important criterion when seeking supplier partnerships.

Your supply chain partner should provide complete visibility and keep everyone in the loop. Being able to communicate, regardless of their system, is essential for the success of your supply chain management.

Communication matters in any relationship but is vital in the supply chain. Unfortunately, poor communication becomes apparent only when it’s too late. Make sure to set clear expectations for reporting and communication.

That’s not to say there’s no room for mistakes, but make sure the logistics provider is thoughtful. Rather than reaching out to your supply chain partner only when something goes wrong, nurture relationships.

Run the tasks given to you at the same time window you expect the supplier to do theirs. Effective communication doesn’t happen overnight. It takes months and years to develop.

And It’s A Wrap!

In summation, you can improve your prospects for collaboration by focusing your efforts on work success. 

Use collaboration as a way to fill in the gaps in your capabilities. A potential supply chain partner will have the proper infrastructure to offer support over the long term.

You need to consider these factors if you are looking for the right logistical partner. If you liked this content, please let us know by commenting and following our page for more such content on innovative business topics.

Additional Reading:

• 6 Ways to Improve Your Supply Chain Strategy
• How to Find the Perfect Software Suite for Your Requirements: 6 Tips
• Streamlining Logistics With A Transport Management Software (TMS)