Comment: how logistics service providers can stand out in a tender

© Joanne Zheng

What sets you apart from your competitors? It’s a simple question that logistics service providers are usually urged to answer during a tender process. They cannot fall back on the standard “our reliability of service coupled with a personal touch…” response – everyone says that. So, how best to answer a question that is not as simple as it seems?

I am reminded of a recent amusing tender response from a medium-sized global logistics company which lavished its opening executive summary with such claims as having a “flat management structure”; with “owner directors committed to their customers” and who are “at their disposal on a 24/7 basis”. A few pages in, the response to a question in the Invitation to Tender on operating hours was merely “09.00 hrs – 17.30 hrs Monday to Friday.”

There was no mention of any out-of-hours or on-call numbers, or indeed any reference to those committed directors who offer themselves to customers on a 24/7 basis. The very first opportunity to demonstrate what their executive summary laid claim to was lost – as was the chance, perhaps, to start distinguishing their service proposition from the competition.

One way to set yourself apart from your competitors would be practise what you preach.

A combination of service and technology

In truth, although this and other aspects of the service offering are a critical part of any tender response, it is highly unlikely that they alone will enable a provider to set apart its capabilities from others. Much more likely to achieve differentiation would be the ability to match great service offering alongside the provision of sophisticated technology that enables a customer to enhance and improve the management of its supply chain.

Many leading logistics providers now provide customers with online visibility of purchase orders and shipments from origin to destination, drilling down to stock keeping units (SKUs) and also offering extensive reporting capabilities. Some logistics providers enable customers to connect with third parties, such as vendors and buying offices, enabling collaboration in the supply network.

So, let’s pick out some key distinctions of both service and technology to really hone in on setting a logistics provider apart from the competition.

Get to know your customer’s business

The key differentiator of any account management function is the commitment to time spent with the customer. Nearly all logistics providers offer an account management capability of some sorts, but many do this at arm’s length, visiting the client only when needed and generally using quarterly business reviews to keep in check with the business. However, those that provide dedicated resources, spending time on site with the client, are always held in higher regard.

In many cases, dedicated resources end up being an added cost to the provider, but what better way to demonstrate “skin in the game” than investing to get to know the customer’s business? After all, how can you offer credible solutions unless you know your customer’s business inside out? Furthermore, spending time in “client world” often offers the opportunity to upsell more services, which can strengthen your relationship further.

Offer visibility that’s real-time, connected and mobile

Few solutions available today offer a truly real-time experience. This is mainly because the provider’s systems aren’t connected to the source data provider in real-time. Shipping lines, airlines, port authorities and so on all provide critical source data, which, if connected, would enable customers to get access to data 24/7 in real-time, enabling business-critical decisions to be made on issues such as late production runs or supply chain disruption.

Access to real-time supply chain data via mobile apps is a vital way to set apart your technology. Although many providers claim to offer this capability, it is interesting that very few demonstrate it in their presentations, and even fewer sight actual examples of how customers have used this functionality tactically to their advantage. Yet, we all use mobile technology in our everyday lives and for many the world stops if any of their devices go missing.

Undoubtedly, the opportunity for mobile technology in the logistics workspace to distinguish capability is huge.

Provide business intelligence to analyse, measure and predict

Great business intelligence tools are delivered by combining account management and supply chain visibility, as the two together enable the supply chain to be analysed in detail, with trend spotting, unit cost calculations and predictive scenarios to automate the decision-making process as much as possible.

Software that enables customers to analyse their supply chain data online, using infographic technology – the sort you commonly use every day on comparison websites – will drive a wedge between today’s sophisticated technology and yesterday’s tired-looking platforms, which often result in data extracts into Microsoft Excel, where it is frequently out of date by the time data is fashioned into something meaningful.

Once you start using a logistics provider’s software, you shouldn’t have to ask for things like quotations or when the next ship is departing Shanghai, or even what your business KPIs are currently running at. These are all functions that a provider’s technology platform can deliver to customers instantly by analysing tariffs, schedules or milestones and calculating or predicting options based on real-time scenarios.

In summary, for those who examine how they can set themselves apart from their competitors, the future is bright – and that brightness will come from the relentless pursuit of customer engagement, together with investment in technology to continually improve and innovate their supply chains.

This is a guest post by Danny Clayton, founder of Droptop Supply Chain Solutions and former joint group MD of Allport Cargo Service Executive