Managing the cost of your outsourced logistics

Most companies just re-tender their current outsourced Logistics & Warehouse operations at the end of the contract term, which often does not yield the full cost and service benefits and opportunities offered by an effective tender process and does not sufficiently challenge the highly competitive market of Logistics Service Providers (LSPs).

In reality the market place and service capabilities of the LSPs will probably have changed over the current contract term and our experience shows that just re-tendering the same operation can provide cost savings in the region of 10% of annual spend says Gideon Hillman FCILT. The potential savings however are far greater

In the last 12 months Gideon Hillman Consulting has managed and developed a number of Logistics and Distribution tenders (a mixture of OJEU and non-OJEU with the combined annual spend in excess of 20M) from the development of the scope of operations; through RFI and RFP processes to final response evaluation and supporting commercial negotiations, which in some cases have yielded savings of between 20 and 30% on existing annual logistics costs.

These tenders have been a mixture of Global, European and UK based Multi-modal Distribution logistics, warehousing and freight tenders across Automotive, Utilities, Internet & High Street Retail, and Food Sectors.

The specialist Consultant team have proven that through evaluation of current and future logistics requirements and subsequent development of a more bespoke service requirement specification, whilst maintaining tight control of the tender process; much greater savings can be achieved. There is also the additional benefit in other areas of the Supply Chain such as reduced WIP and inventory savings as the logistics and distribution lead-times and therefore days within the Supply Chain are reduced.

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