Don’t Get Caught Without Transport This Winter

Today’s post is by Mark Davis; Sr. Vice President of Operations and COO at SafeSourcing.

In a recent article from Inbound Logistics they covered ten tips companies should be taking advantage of to prepare for what the 2015 Edition of the Farmer’s Almanac is predicting to be another very tough winter for most of the country.   The article was a good one for logistics professionals to keep in mind with a few major points bubbling to the surface we will focus on in today’s blog.

Don’t wait – One of the big issues we, at SafeSourcing, saw with our clients wanting to source transportation services last year was that the ones that waited too long were faced not only with high rates, but in many cases, with no supply of equipment to their locations at all.  The weather was obviously at play here because of the inability for trucks to be on the road leading to a severe backlog of shipments, but another factor was that there were far fewer available drivers than ever before.  The retiring Baby Boomers did not help in this area and it is an issue that is likely to continue to get worse in the next 10-15 years.   If you are involved with sourcing logistics for your company, you should be looking at locking things down for your early 2015 needs today.

Create the backup plans – There are two main areas to consider when developing your backup plans.  The first area is to create a backup plan for your own logistics needs.  The shipment of your product and any of the raw materials and products you handle shipment of yourself.  The second area to create a backup plan in is with your current suppliers.  If your suppliers are responsible for shipping product to you, make sure you diversify the supply sources to other areas of the country where weather might be having an effect.  Having a primary and secondary source scenario is always a good one regardless but this winter it may be the difference between making and losing money.

Communication – Virtually any blog ever written could probably have this item included in the mix in some way.  Internal and external communication is essential to dealing with what this winter may be bringing to our businesses.  Make sure your company understands how inclement weather will affect its business.  Internal surveys asking departments what they would do if product could not be shipped in or out of the company and what effect it would have is a good way to get that thought process started.  Externally, you should be strategizing with your supplier partners to plan for the worst case scenarios.  Make sure they understand that you value their efforts but that you may have to put out an RFI for some secondary suppliers in case the weather prevents them from getting product to you.  They will appreciate not being blindsided and you will be able to strengthen your network of suppliers openly.

At SafeSourcing we have seen the effect bad weather has on our customer’s logistics needs and have successfully developed projects to strengthen that network without damaging good relationships with incumbent suppliers.   We use our team, expertise, database and eSourcing tools to ensure a company has all of the information necessary to make the smartest decision for their business.  For more information on this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Today’s post is by Mark Davis; Sr. Vice President of Operations and COO at SafeSourcing.

Over the course of the past four days we have taken a look at a common process companies go through to evaluate their Repair & Maintenance spend for equipment their businesses use.  Depending on where the company is in deciding on a break-fix VS preventative maintenance focused plan determines which of three steps they are likely to run.  Controlling current expenses while information about the internal and external landscapes are gathered is the first step many companies take before finally ending up with a primarily preventative maintenance model.  Today we will take a look at some of the benefits our customers are seeing with this approach.

Extend the life – Companies that move toward a primarily preventative maintenance based program are seeing that they can extend the life of their equipment by 10-15%.  Because vendors are inspecting the equipment and performing regular preventative maintenance tasks, the equipment operates in a manner it was designed to and maintains a life expectancy at our beyond what was intended.  A side benefit to having the equipment run as it was designed, was an overall energy efficiency improvement of 8-15% by customers employing a PM program.  As motors, compressors, etc. operate free of debris and dirt they will use less energy leading to reduced energy related costs.

Reduce the severity – Although helpful, PM programs do not eliminate issues that arise with equipment, however when a PM program was in place, SafeSourcing customers saw a 15-20% reduction in the frequency of repairs that were needed and 20-30% reduction in downtime when that equipment did break due to a reduction in break severity.    Break fix costs and operation downtime are two of the biggest enemies to a business.  By having PM vendors perform routine inspections, issues that were just beginning were caught early and addressed quickly and less expensively which caused less downtime of the equipment.  These inspections also reduced the number of issues due to being caught early and by having the equipment properly calibrated to operate as intended.

Reduce the overall cost – The overall affect customers saw when improving on or switching to a primarily preventative maintenance focused model was exciting, averaging 15-20% from their current R&M costs for that equipment.   Factors such as the amount of attention which had previously been devoted to researching which program would fit and the existing internal expertise on R&M issues had the potential to raise these numbers significantly.  Customers found that they purchased replacement equipment less frequently and repairs happened less frequently and with less severity than they had before.  Reduced downtime and increased energy efficiency were KPIs seldom analyzed but have very real dollar savings attached to them.

At SafeSourcing our goal is to develop a program of sourcing that is going to have the best fit for a company.   We use our team, expertise, database and eSourcing tools to ensure a company has all of the information necessary to make the smartest decision for their business.  For more information on this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Today’s post is by Mark Davis; Sr. Vice President of Operations and COO at SafeSourcing.

Over the past two days we have been exploring some steps our customers are taking to learn which model of repair & maintenance works best for them.  Many will begin with a quick RFP to try and lock in and improve hourly rates and costs for normal break-fix occurrences while they study their internal landscape to determine which model is the right fit.  Once completed, many will then look at the landscape of the industry to learn more about suppliers are doing and offering.  Generally the current break-fix companies will be invited to phase to participate as well. 

The third phase allows companies to standardize what they want in terms of service and gives all suppliers a chance to win the business with their best overall proposal and the incumbents a chance to add to their reputation and service with any last minute adjustments they want to make.

PHASE 3 – Lock down the overall offering

Well defined terms and conditions – Yesterday we discussed the importance of putting together a Best In Class statement of work for the suppliers to offer pricing against.   By defining that in advance it will be easier to compare where all of the vendors fall on the same set of details.  Just as important is define the Best In Class contract terms in advance of award of business.  This would include service conditions, background requirements of the employees coming on site or payment terms for example.   Having this stated up front will ensure there are no surprises for the suppliers when they are awarded the business.

Pricing by location – With the equipment defined at each location and the statement of work established, it will be much easier to collect preventative maintenance plan pricing for each location.  This will account for variances in the life and type of equipment by location as well as demographics that would increase or decrease costs such as the location being located in a densely populated metropolitan area or in a more difficult to service rural area.  If necessary, break up the locations into groups to allow suppliers to focus their attention.

Factor in loyalty and incumbent performance – Once pricing proposals have been collected and pencils have been sharpened as far as they will go it is important to factor in all of the value a supplier brings to the table but especially the history of loyalty and customer service on the part of the incumbents if they have been good partners to work with.  In virtually every instance we will show our customers an award scenario where nothing changes on the part of their supplier even if the incumbent was not the lowest bidder. 

We will conclude the series tomorrow by sharing a summary of the results our customers are seeing by taking this three-step approach and how successful those that have chosen to move towards a primarily preventative maintenance plan have been.  For more information on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Today’s post is by Mark Davis; Sr. Vice President of Operations and COO at SafeSourcing.

This week we have been going through a five part series examining the steps companies are taking to determine their repair and maintenance needs based on which of the of three groups Monday’ blog defined.  We continued yesterday with looking at Phase I of three approaches many companies follow by controlling the current costs while they prepare for an overall evaluation of where their company stands.   Today we will look at the second phase virtually all of the companies we deal are taking.

PHASE 2 – Understand the current landscape

Whether a company has a current preventative maintenance plan in place or just exploring the possibility, taking the next step of a Request For Information is a solid next step many SafeSourcing customers take to learn and validate the details they need before proceeding to the third phase.  

Best In Class Details – During the Request For Information phase 2, one of the important pieces of information to collect will be the statement of work details that go with a supplier’s preventative maintenance program as well as a break-fix program.  These details will allow a customer to pick the best aspects of each program and develop a program that works best for them and for the way they do business.  These details can then be used to collect and compress pricing in the final stage 3.

Evaluate New Talent – Service industries are some of the most volatile in terms of new companies entering, companies consolidating and companies leaving the market.  As such learning what new companies have emerged is an important step every company should take periodically so that they can make sure they aren’t missing value.  This is especially important when new companies have been formed by employees of market leaders or 2-3 medium companies combine into one strong potential leader.

Coverage & Capabilities – Along with understanding who the new players in the industry are a Request For Information can uncover other details about new capabilities and geographical coverage suppliers are offering.  National companies who are looking to find suppliers that can provide total coverage for their organization will find this a very important piece of the RFI.  The RFI can also uncover new technologies and service plans that are Best In Class that the customer is unaware of.   All of this data can then be used to create the final RFP for those companies that continue pursuing a primarily preventative maintenance focused model.

Tomorrow’s blog will look at the third and final phase companies are using to establish a best in class solution for repair and maintenance programs.  For more information on these phases or our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.