Procurement has come a good distance. What was as soon as a operate centered on driving down prices is now central to managing organisational threat, guaranteeing sustainability, and enabling progress. However the instruments and processes that procurement depends on haven’t stored tempo, significantly with regards to choosing logistics companions.
Few mechanisms illustrate this lag extra clearly than the standard logistics Request for Proposal. Initially designed to make sure accountability and value effectivity, many RFPs at the moment are actively undermining strategic decision-making. As an alternative of enabling perception, they’re performing as obstacles and obscuring what actually issues whereas rewarding the flawed type of suppliers.
And in right now’s high-scrutiny, high-speed logistics surroundings, that is exposing companies to avoidable threat.
When Field-Ticking Turns into a Danger Issue
It usually begins with good intentions. A service fails. A lesson is realized. A brand new clause is added to subsequent 12 months’s RFP. Repeat that cycle over a number of years, and what you’re left with is a bloated guidelines of edge-case eventualities and irrelevant necessities. It’s commonplace to see RFPs for fundamental courier providers asking for insurance policies on coaching, catering prices or provide chain points that don’t have any bearing on the service being procured.
Over-reliance on templates turns provider choice right into a spreadsheet train. It encourages responses designed to fulfill paperwork, not efficiency. And it penalises the very qualities that truly make for a resilient logistics associate: adaptability, readability, and expertise navigating complexity.
Getting Clear on What You Truly Want
So we’ve established that the RFP course of shouldn’t start with a spreadsheet. The reliance on such a doc provides a false sense of management. Each area is accounted for, however none of it solutions an important query: Can this associate assist ship our enterprise goal?
In the event you can’t articulate what you’re making an attempt to attain with this service (is it growth? Pace? Model differentiation? Buyer loyalty?), then you definately’re in all probability not able to run a procurement course of. You wouldn’t begin constructing a home with out the foundations or architectural drawings. As a result of what you’ll get is a house that’s structurally flawed. The identical goes for procurement.
As soon as that goal is obvious, the remainder of the method needs to be formed round it. Which means evaluating not simply what a provider does, however how they assume. Can they adapt? Do they perceive your operational mannequin? Have they labored with companies at your stage, in your market, together with your constraints? Can they work like a correct associate?
You don’t get these solutions by way of checkboxes. You get them by way of conversations. References. Web site visits. By really chatting with the groups who will probably be liable for supply, not simply the salespeople who’ve fee targets to hit.
Procurement professionals want the house and confidence to make strategic choices, not simply ones that can “cowl their backs”. In fact, there are strict compliance and security bins to tick, however don’t allow them to cloud your judgment fully.
Strategic Blind Spots in Fashionable Logistics Procurement
Nowhere are the shortcomings of present procurement processes extra seen than within the sourcing of same-day or on-demand supply providers. Not like conventional logistics, which function on mounted schedules and bulk motion, last-mile providers require real-time responsiveness. It requires agility, velocity and adaptability. Warehousing timelines don’t drive expectations, however fairly shopper apps that provide stay monitoring and near-instant dispatch. There’s nowhere to cover.
Procurement groups extra accustomed to next-day frameworks usually wrestle to account for that operational shift. Some use monitoring programs that solely replace each few hours, that are utterly incompatible with providers that start and finish in much less time than that. Others deal with on-demand supply as interchangeable with bulk carriers, failing to evaluate whether or not suppliers can really assist the required buyer expertise.
There’s additionally a deeper threat round platform fashions. Some suppliers supply ultra-low pricing not as a sustainable service, however as a path to entry buyer knowledge and set up a direct relationship. In these instances, the endgame isn’t to serve the retailer, but it surely’s to displace them. Procurement should have the ability to spot when a supplier’s incentives aren’t aligned with the enterprise they’re pitching to assist.
Not All Value Financial savings Are Created Equal
There’s additionally an growing strain from the folks holding the purse strings, for procurement to cut back prices.
However specializing in unit economics alone could be short-sighted, significantly in last-mile supply, the place the true value of failure is usually buyer loss, model injury, or service breakdown.
It’s the birthday cake that didn’t arrive on time. The damaged partnership with a retailer that couldn’t meet its buyer promise. The misplaced repeat buy as a result of one thing wasn’t delivered in time. All sunk time in customer support and courier administration.
These are severe industrial dangers which regularly outweigh the few cents saved by selecting a lower-scoring vendor. Procurement wants to have the ability to quantify these trade-offs and clarify them to the board.
When supply turns into a customer-facing differentiator, it may be an actual income driver. it’s now not only a line on the P&L that the board scrutinises. When executed proper, it might enhance conversion, unlock new propositions, and elevate model belief. However provided that the associate behind it’s chosen with that ambition in thoughts.
From Vendor to Accomplice: What the Way forward for Logistics Procurement Requires
The excellence between a provider and a associate is refined however very important. A provider meets the spec. A associate is there serving to to jot down it.
Too usually, RFPs assume the organisation is aware of precisely what it wants, and that suppliers are merely there to cost it up. However in areas like same-day supply, that assumption doesn’t maintain. Companies could also be exploring uncharted territory, with restricted precedent and shifting variables.
In these instances, the provider must be a collaborator. Somebody who can sense-check expectations, flag operational dangers, and co-create a sustainable mannequin.
Procurement groups should determine what sort of relationship they’re actually after, and be sincere about that from the outset. As a result of nothing undermines a partnership sooner than promising collaboration, after which being handled as extra of a commodity.
It’s not fairly over for the RFP…
There’s no must throw out the RFP altogether. But it surely does want a rethink.
Escape the checkboxes. Don’t simply rating for security, but in addition rating for strategic match. Cease pretending threat could be eradicated by way of paperwork, and acknowledge that it must be managed by way of partnership.
Fashionable procurement shouldn’t simply be about minimising draw back. The correct supply associate can do greater than meet a service stage. They’ll allow a brand new proposition, energy a brand new channel, or assist your organisation adapt to a altering market.
RFPs, if executed proper, could be a key enterprise driver. We simply want to start out pondering outdoors the [check]field.
