LOGISTICS OUTSOURCING

Strategically negotiate with logistics service provider to get the best price and service level

Context

Most of the companies will perform tender process for the Logistics Service Provider (LSP) selection based on the cheapest price quotation.

Of course price matters when you negotiate LSP contracts. But what matters more is the understanding of what drives the pricing, and of what makes a service contract worth the rates you agree to pay.

To succeed in the negotiation, a thorough understanding and control of the value-added service provided by LSP is necessary.

Our Approach

1. SCENARIO MODELLING AND BUSINESS CASE + OPERATING MODEL DESIGN

  • Logistics and transport footprint

  • Process description with responsibilities split

2. TENDER SPECIFICATIONS AND LSP LONG LIST PROPOSAL

  • Tender specification document

  • LSP long list identification

  • Selection criteria and process use design

  • Budget and unit cost pre-calculation

3. LSP SELECTION AND CONTRACTING

  • Initiate offer and risk analysis

  • LSP clarification, alignment and negotiation process

  • Final selection support

  • Contract negotiation support

4. PROJECT DEPLOYMENT AND IMPLEMENTATION SUPPORT

  • Project tasks tracking

  • Progress KPI

Case Study

CASE 1: For a world leading chemical manufacturer, Forizons supported with tools and expertise to get the best price and service level from 3PL.

The target operating cost was defined, and new rate structure was proposed for 3PL negotiation.

CASE 2: Forizons helped a beauty product brand with the logistics service provider tender process. The Target Must Price achieved in line with the customer objective and the new operation go live date was achieved per plan.

Impacts

Significant

Cost reduction

Improve

Supplier service level

Improve

On-time delivery

Clients

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