Retail surgery: What should I be looking for from our ideal supplier?

Choosing a supply chain partner is a complicated project. The process needs to be robust enough to identify the right partner for both the short and long term, says Bob Gill, director at supply chain consultancy Total Logistics Distribution.

First, retailers need to decide what they are looking for from their logistics partner. Important factors to look out for include a solid operational performance on average and at peak levels, to ensure they can provide the level of service needed. “On-time, in-full deliveries should be above 98%,” says Gill.

Potential partners also need a proven track record in delivering operations for similar organisations. “Ask their other retailers and customers in other industries,” says Gill. “Proof of delivery notes are vital for confirmation that the customer has the goods.” In addition, retailers should look for partners that have a competitive cost base.

Gill adds there are other ‘softer’ factors to consider as well.

The objectives of the two companies need to be aligned, and there needs to be a good cultural fit.

“Your logistics partner needs to work with you to achieve a successful ongoing partnership with tailored and workable lines of reporting,” he says. “A great contract manager is an absolute necessity, as their commitment to your business will make all the difference.”

Including incentives in the contract, such as bonuses for excellent service, can also improve things, or sharing cost savings with the partner if cost cutting is important to you. Finally, regular reviews can prevent the relationship from going stale.