Thanks to the previous article "3PL vs 4PL: Explaining the difference for logistics customers", it’s now easier to talk about 360° vendor assessment. The key thing to remember here is that exactly what we’re evaluating, while mostly similar, will vary – between industries and regions, according to the requirements of the specific project/customer, and based on whether we’re looking at the logistics or the supply chain, i.e. 3PL or 4PL.
Let me also comment here that while there are many software products claiming to undertake these vendor assessments, I’m not a big fan of them, as I believe they ignore, to a degree, two of the most important aspects of any assessment of any logistics service provider’s capabilities, namely 1) communication, the centre of all logistics, and 2) experience, in the very real sense, not just theoretical.
Here are five points to review when considering a 360° vendor assessment and how it’s affected by 3PL or 4PL:
1. Experience; case studies and historical work
As always, it’s about what’s been performed in the past – not just what jobs were done, but also what resources were put into them, both human and capital, and whether these are available to you. Too often, companies claim experience for people who’ve left – it’s vital that the team proposed for the work can handle it. Case studies are great – they show the culture – but they should also show the company’s internal learning systems. Lessons learned on projects shouldn’t stay with the person or team who undertook the work – they should be shared throughout the organisation or put in a library for all to access.
2. Compliance; health and safety
Really, not much needs to be said here – the documents are clear and well-known. Just keep in mind that they’re not a burden; they’re designed to be tools to help us optimize safety standards and operational efficiencies. Don’t shy away from H&S documents; embrace them and make sure your service providers do more than just pay them lip service.
3. Systemization and versatility
This is often a double-edged sword, as many companies develop highly successful systems that become so core to their business, it makes them inflexible. While it’s important to have strong, capable systems, and to regularly review them, it’s vital to maintain balance among good team knowledge, education and clear but versatile procedures. If any of these is allowed to dominate, it will lead to inflexibility and inefficiencies.
4. Structure and methodology
Companies must show a clear and efficient internal structure and how it will play out when implemented on to a project or fitted to cargo movements. Similarly, almost every company needs to demonstrate a methodology for booking, moving and tracking cargo that shows change management procedures and levels of authority/responsibility when challenges arise, to allow for swift reactions and corrections.
5. Subcontractors
Disclosing subcontractors’ names can be a sensitive matter, but companies should disclose how they are chosen, vetted and evaluated in terms of service levels. They should also confirm that all subcontractors have their SHEQ and compliance certification.
Here are five points to review when considering a 360° vendor assessment and how it’s affected by 3PL or 4PL:
1. Experience; case studies and historical work
As always, it’s about what’s been performed in the past – not just what jobs were done, but also what resources were put into them, both human and capital, and whether these are available to you. Too often, companies claim experience for people who’ve left – it’s vital that the team proposed for the work can handle it. Case studies are great – they show the culture – but they should also show the company’s internal learning systems. Lessons learned on projects shouldn’t stay with the person or team who undertook the work – they should be shared throughout the organisation or put in a library for all to access.
2. Compliance; health and safety
Really, not much needs to be said here – the documents are clear and well-known. Just keep in mind that they’re not a burden; they’re designed to be tools to help us optimize safety standards and operational efficiencies. Don’t shy away from H&S documents; embrace them and make sure your service providers do more than just pay them lip service.
3. Systemization and versatility
This is often a double-edged sword, as many companies develop highly successful systems that become so core to their business, it makes them inflexible. While it’s important to have strong, capable systems, and to regularly review them, it’s vital to maintain balance among good team knowledge, education and clear but versatile procedures. If any of these is allowed to dominate, it will lead to inflexibility and inefficiencies.
4. Structure and methodology
Companies must show a clear and efficient internal structure and how it will play out when implemented on to a project or fitted to cargo movements. Similarly, almost every company needs to demonstrate a methodology for booking, moving and tracking cargo that shows change management procedures and levels of authority/responsibility when challenges arise, to allow for swift reactions and corrections.
5. Subcontractors
Disclosing subcontractors’ names can be a sensitive matter, but companies should disclose how they are chosen, vetted and evaluated in terms of service levels. They should also confirm that all subcontractors have their SHEQ and compliance certification.
