Many companies are finding they need a strong supply chain management partner. In making your decision, consider four primary issues: technology, services, transparency and buying power.
Today’s consumers expect more from the companies they buy from. They expect same-week or even same-day shipping. They expect the return process to be quick and intuitive. They expect companies to be open and communicative.
While this may be second nature for large companies, small to medium businesses are under increased pressure to live up to the same standards. Accommodating customer expectations has proven more difficult during a pandemic— causing carrier delays and increased carrier fees.
That’s why so many companies are finding they need a strong supply chain management partner. But picking the right partner is a challenge and a decision that can have lasting effects on your business. An overwhelming 96% of companies believe measures should be taken to avoid future supply disruptions, but only about half (52%) have done so to date.
In making your decision, consider four primary issues: technology, services, transparency and buying power.
1. What technologies are they using?
Digital technology is accelerating the pace of business and transforming supply chains–leading to a 50% reduction in process costs and increasing revenue by 20%— according to the MIT Center for Transportation and Logistics.
In defining and executing your plan, take a good look at the technologies used by your potential partner. A list of such technologies and software might look like this:
- Numina automation machines
- Mobile label printers
- Mobile receiving
- Wire-guided pickers
- Lot control automation
- On-demand packaging
- Warehouse management system
- 1 Shopping Cart
- Adobe BusinessCatalyst
- Transport logistics management
As you review the potential partner’s technology offerings, be sure to ask how each one will contribute to your company’s overall business goals. Be clear about your company’s specific technology needs and make sure your potential partner has answered every question you’ve asked about their technology services.
2. What services does the supply chain management partner offer?
When considering whether to sign with a supply chain management partner, many companies make the mistake of thinking it is an all-or-nothing decision. In other words, they’ll either do everything in-house or outsource it. It’s not a binary decision, just like it’s not a one or the other decision to use vendors in general. Everyone’s going to use vendors. The question is, what do you want them to do? What weakness can they fill?” When considering a partner, list out the things you already do well. Then select a partner offering services that can fill the gaps in your process.
Another consideration is the potential partner’s location and reach – while you may be operating only regionally initially, can your partner help you to scale to a national or even an international level? Also, geographically diversifying your supply chain is an excellent way to prevent future disruptions similar to ones brought on by the COVID-19 pandemic. For example, think of massive long-term consequences to the supply chain after a giant ship became trapped in the Suez Canal. Ensure your SCM partner can help you scale and grow your business while preparing for the future.
3. Do they offer total transparency?
According to a 2020 Statista report, 65 percent of supply chain executives consider visibility to be challenging. “It should be every organization’s goal to achieve supply chain visibility for multiple supply chain functions across the organization, including your partner networks,” said Christian Titze, research director at Gartner. “Supply chain visibility capabilities lay the foundation—the capturing of plans, events and, relevant supply chain data—to generate value and mitigate risk for an organization.”
Ask your potential partner how they plan to provide transparency. Do they offer real-time tracking and zero hidden fees? Are the key driver metrics readily available to you? Remember: without total transparency, you’re blind to the big picture.
4. Can the supply chain management partner increase your buying power?
One reason for hiring a supply chain management partner is to gain access to a broader range of resources than you have on your own. They’ve built relationships with service providers and have networks from which to select suitable suppliers for your specific business goals.
When choosing your partner, ask them specifically how they can increase your buying power. Do they have the right connections? Whom do they regularly work with on behalf of their clients? What is their negotiation process? How would they coordinate with multiple suppliers to get the job done in the most efficient, affordable way?
With today’s consumers demanding more, you too must demand more of your supply chain and the partner you select to manage it. Consider the technology, services, transparency and buying power they can offer you—because, in the end, those are the same offerings and benefits you extend to your customers.