In the supply chain and logistics industry, a request for proposal or RFP serves as a tool to help shippers find the best 3PL to meet their business needs. The key in any RFP process is finding the right partnership between the shipper and the 3PL. Cultivating this perfect working relationship starts with a detailed and thorough RFP.
THE BASICS: WHAT IS AN RFP?
An RFP is defined as a document in which a company asks those interested in their products or services for a business proposal to help lay out formal processes. The document is designed to help align pricing and services with shipping needs. The actual RFP, as well as the RFP process, helps shippers communicate their expectations and align with potential partners to meet their business goals. It outlines the 3PL’s role and illustrates accurate pricing.
With predictions of a 10% increase in truckload rates next year due to high demand and tight capacities, it’s imperative that shippers are taking necessary steps to control their transportation costs. Here are three tips for optimizing your logistics RFP for success in 2021 (and beyond).
3 TIPS FOR OPTIMIZING YOUR LOGISTICS RFP
There has never been a more important time to leverage data in real-time. A lot of businesses collect data, but it’s about more than just numbers. Using analytics to drive business decisions is key to growth and revenue.
Here at WSI, we recommend thinking about your logistics needs from a 50,000 foot view. To do so, start with identifying your key performance indicators (KPIs) and how those align with your business objectives. This insight will highlight value propositions for the logistics RFP and ensure that all potential partners are working towards the same goals.
“Without clear, effective KPIs to back up these plans, securing executive support for transformation becomes unlikely. When executives understand how metrics and ongoing improvements directly align with the business, they’ll confidently support an initiative that delivers real value to the company.” Stan Garber
Growth projections, forecasting and scalability are all examples of high-level KPIs that impact transportation and cost. A detailed RFP should include these top down factors, as well as smaller details like mandatory requirements. Quality logistics providers will work with their shipping partners to strive for continuous improvement. The more information, the better when it comes to the RFP process.
Tip: Use KPIs from various stakeholders to get a full 360 view of business needs and objects that will help shape the RFP.
Transparency is imperative to build trust and work through negotiating best pricing and potential working relationships.
For a logistics RFP, it’s essential to understand more than just rates when it comes to picking the right 3PL. Any transportation partner should be eager to provide records, shipment volumes, on-time delivery performance and ratings for a full view of their capabilities. They should demonstrate how they drive decision-making through real-time data. This insight is instrumental in making informed decisions and knowing when to change course to protect against disruptions, ultimately saving time and money.
Tip: Ask for recent vendor scorecards to see how potential partners have performed in key areas, including accuracy, timeliness and efficiency.
SHIPPER OF CHOICE
The unrest of today’s market has highlighted that carriers do, in fact, have choices when it comes to selecting a shipper. In order to stand out, shippers need to provide the best experience for the carrier. Here are some ways to become a shipper of choice:
- run timely and efficient dock operations
- standardized packaging for loading and unloading
- reduce wait times
- provide clean and comfortable break rooms and restrooms with WIFI available
- pay invoice on-time and accurately
Shippers who provide excellent customer service and efficiency for their transportation partners often see better rates from carriers and recurring business opportunities.
Tip: Remember, time is money. Make sure your logistics RFP addresses consolidated shipments and leveraged locations to find a transportation partner that wants to work with you.
There are many factors that go into finalizing a logistics RFP. The best partner has an unwavering understanding of your business goals and the strategy to achieve those goals.
WSI understands the RFP process and how our logistics solution can help increase efficiencies, deliver more reliable performance, and minimize costs. In other words, throughout the RFP process, we take the time to understand how our Lean operating principles impact your bottom line.
Looking for more information on how WSI can benefit your organization? We’re here to help.