Logistics companies operate in a service industry, none more so than specialist operators such as fulfilment companies. Mark Hewitt, CEO of iForce, fast emerging as the UK’s leading fulfilment company, offers companies deciding to outsource advice on what makes a good logistics partner.
When a company outsources its logistics operations, whether they are core logistics or specialist services such as efulfilment, it entrusts the lifeblood of its operation to its logistics partner. It should come as no surprise therefore that the company will not merely seek smooth operations; it will expect operational excellence.
Recent surveys suggest that since 1997, when there was generally a greater expression of dissatisfaction at the levels of service clients received from their logistics partners, customer satisfaction levels have raised. Interestingly, the surveys also indicate that suppliers themselves tend to be more pessimistic about satisfaction levels than the users. However, if this attitude drives logistics operators to continually improve customer service levels, it’s a positive development for both operator and customer.
This is because logistics is a service industry and nowhere more so than in specialist logistics services such as efulfilment. The objective for any service provider should not merely be to provide an acceptable service but to delight customers by gaining their trust and working in partnership to improve the overall supply chain.
Outsourcing fulfilment, in particular, to a partner that can offer high levels of customer service can offer a fast growing company, such as an online retailer, numerous advantages. What then are the key ingredients to excellent customer service?
One of the main problems experienced by any fast growing company is having an infrastructure that can keep pace with their growth; the smaller the company, the bigger the problem. Take for example a fast growing, small online retailer that may initially require a 30,000 sq ft warehouse. If however if it is attaining double digit growth it will rapidly outgrow this facility well within a typical five year rental agreement. A fulfilment provider with a comprehensive infrastructure will be able to facilitate such growth within its established distribution centres.
Furthermore, a good fulfilment partner will operate the facility as if it was an integral department of the customer’s own business. That means constant communication and staff fully cognisant of the client’s business ethos.
By demonstrating a flexible and efficient operation that meets service level agreements and key performance indicators, a fulfilment partner will provide its customer with confidence that it can handle not only their current throughput but that it carry that through as the business increases. With this confidence in its fulfilment partner, the customer is free to concentrate on its core abilities of sales and marketing to fuel further growth.
Losing innovative capacity is an often expressed fear factor customers have about outsourcing. Rather than optimising revenue through tried and tested procedures, the client will be looking to its logistics partner for some fresh thinking on the optimum way to get his products to the market. So an innovative capacity is essential.
Specialist companies in particular operate on their innovation – either in their skills and experience in new or emerging fields or with information technology systems designed in house, which offer a unique edge.
Industry leading technology will have a big role to play here. It should offer robust integration, full visibility, rich functionality and be highly configurable. It should be accurate, efficient, easy to use, easy and flexible to design and adapt and to integrate with other systems.
Communication is the most important word in the vocabulary of customer service. Key Account Managers (KAMs) are usually the main point of contact for clients and are central to the relationship between customer and client. Being friendly and approachable is a simple first step to a good relationship. The KAM should also maintain regular contact, respond quickly and positively to any issues, take responsibility for dealing with any problems and always be available.
Furthermore the KAM should not only have a thorough knowledge of his own company’s systems and processes but should also understand the client’s business. This will enable the KAM to develop a proactive approach to client relationships and manage clients’ expectations.
While the KAM will play the key role in a stable client service to develop long term relationships, teams should be created with multi-level client contacts to reduce dependence on one person.
Small and specialist logistics operators often have an advantage over the large third party operators when it comes to partnerships. They can be closer to their customers and be easier to contact – from the key account manager to the CEO. A common perception among customers is that a large third party operator may treat an account as one of a number within their business, while an account placed with a smaller operator will be more precious so it will go the extra yard to provide good service. The onus then is on the small/specialist operator to live up to that reputation.
The best overall advice is to find a logistics operator that will focus on its partner’s strategic goals and how it can contribute to their achievement. Its management should not only be fully versed in their own company but also have a full understanding of the operation, ethos and needs of their client. There should be clear communications channels. The logistics operator should be proactive when it comes to solving problems and all the staff should have the ability to deal with problems and provide a satisfactory solution. They should also be able to respond quickly. On a more long term basis, the logistics partner should be able to offer strategic advice and provide regular reports. While on a more basic level, even cleanliness and orderliness in the facilities will help efficiency and speed of service.
Will your logistics partner provide all of this? If it can it will achieve the operational excellence you seek while reducing your costs and enabling your company to grow.