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How do you know if you are getting value for money from your transport provider?

By Jonathan Kittow on 05/10/20 10:33 |

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Reducing supply chain costs is on every Director’s agenda– but especially now, what can you tackle quickly and how do you know if you are getting good value for money?

 

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Targeting distribution expenditure for fast results

Benchmarking for warehousing can be relatively straightforward –comparing handling activity productivity, staff and Materials Handling Equipment levels and rental costs will provide a simplistic guide to how well you measure up.Supply Chain Management visual

Improving productivity is often possible, but unless you can make radical changes to inventory policy or customer delivery requirements , the impact is often relatively limited on the cost of the operation.

 

With customer transport often representing up to 50% of the domestic logistics budget, it provides an equally important area to target, but how do you know whether you are getting value for money?

 

Benchmarking transport typically compares fleet operating costs, including MPG, Fuel and labour costs and vehicle utilisation – excellent if you are running your own fleet – but what if you are not?

  • How do you know if you are getting value for money?
  • How do you know if any of the providers you invited to tender are running their networks as effectively as they could, or should be? and
  • How can you know what you SHOULD be expecting to pay?

The Gold Standard Benchmark GSI™ was developed to help logistics procurers predict how much they should be SPENDING on their palletised delivery services. Jonathan Kittow, Director Simply Supply Chain commented “We benchmarked a health and beauty client after they’d just negotiated a new contract –  they had just saved 30% of the cost, however we demonstrated they were still paying 30% more than they could have done.”

 

Comparing your own activity profile against a standard and then using this to compare against you peers and competitors, we can help you identify how much you might save if you were to buy your services at the Gold Standard rates – and it can help you deliver significant savings within 12 weeks. Our clients typically expect to save 10-25% and some have delivered 50% savings within 12 weeks of the benchmark – AND improved service levels.

 

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Benchmarking Logistics supply chain

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