Reprinted from SUPPLY CHAIN DIGEST, April 7, 2008
Expert Insight: Supply Chain InView by Ann Drake
Bids: The Good, the Bad, and the Only
Providing Accurate Information will Streamline the Process
In today’s challenging and ever-changing business environment, the number of companies who decide to outsource their logistics and supply chain management is growing. Some of these companies are outsourcing for the first time; others are changing supply chain partners for a variety of reasons.
In either case, customers use RFPs to try to obtain an objective means of evaluating potential providers. They need solid proposals – and, often, they need them fast. Realistically, how long does it take to secure “good” bids? And what steps can be taken to streamline the process?
The time it takes will vary based on the complexity of the proposal as well as the availability of accurate information that can be used by prospective providers. For example, in complex situations, site visits will provide valuable insights (for example, about the management team, implementation approach, and all kinds of risk mitigation) that mere facts on paper won’t.
One of the most time-consuming activities in the bid process is analyzing the information on which the bid is based. Companies who provide accurate information at a summary level – instead of leaving the data analysis up to the 3PL provider - will enable providers who perform network modeling to do so more quickly. This suggests that reviewing and cleaning data before it is sent out to providers will save valuable time. One of the biggest obstacles to a “good” bid is basing it on incomplete or inaccurate information. In fact, it’s an operational or financial disaster waiting to happen.
Beyond good hard facts, agreeing upon assumptions and making a clear statement about what is to be achieved also will result in better bids and provide a level playing field for comparison.
The time allotted for response to a 3PL bid can realistically be between two and eight weeks, depending on the complexity. Larger projects that are more strategic in nature will take longer because data is not the only factor that should be considered. A truly successful relationship also should be based on a cultural alignment and a partnership approach that facilitates cooperation and communication. I’ll write more about this absolutely critical aspect of choosing a supply chain partner – and about evaluating the provider a company has now - in my next blog.
© Copyright Supply Chain Digest. April 7, 2008. All rights reserved.
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