Key among the many aspects of the procurement process is proper carrier selection. Transporting materials locally, regionally, and globally may involve multiple providers. The process selecting your carriers can take up to 6-months depending on the scale and complexity of the material and equipment used in production.
Some considerations in selecting carriers include:
Geographic Coverage of Carrier Network
Any carrier partner network needs to be able to efficiently transport goods and material from suppliers to destination. Ensuring selected carriers have experience within the required geographic improves the efficiency and increases reliability.
Cost Efficiency
Often organizations look most strongly at the cost. The carriers combine the modes of transportation necessary to meet delivery timelines as cost efficiently as possible. While cost is a critical factor it is but one of many.
Shipping Options
When developing a carrier network, the partners are generally selected based on normal business operations. But, the network should provide the organization with options to address a range of scenarios. From the unpredictable to seasonal variations to changing competition, the carriers should be able to handle a range of variables.
Carrier Scalability
A plan for expansion must include projections of growth. Any assessment of carriers must include consideration of the ability to scale to meet or exceed the projected increase.
Logistics Technology
Compatibility of technology between the organization and carriers is critical to managing the supply chain. While the current state of technology and integration is important, selected carriers must also be nimble and able to adapt as the organization’s needs change.
Of course, as part of the assessment, due diligence is the responsibility of every organization. There are many areas which must be vetted. While there are commonalities among all carrier relationships, each organization must also identify the unique aspects of their program and vette them accordingly.
Common aspects of carrier operations that need to be vetted.
- Proper Insurance and Licensing Throughout Coveraged Geography
- Historical relaibility, on-time record
- Carrier Safety Record
- Customer Service (reference checks for like programs)
Selecting and creating the right carrier network is critical to the success of any supply chain and procurement program. While price is a consideration, it is clear that there are many other factors which must be considered. The best carriers may not be the least expensive. When considering the many aspects of the procurement process, it is important to prioritize the ability of the carriers to meet all the priorities.
