Congratulations! You have successfully executed your Request for Proposal (RFP) event and contracted all of your new carriers. You have even acquired some pricing locked in for two years. All of your plant locations have routing instructions, and your vendors are onboard with entering your inbound material shipments into your Enterprise Resource Planning’s (ERP) transportation module for automatic carrier selection and tendering.
Your freight is ready to be moved within the model you have set up. You have spent a significant amount of time on network design, planning, procurement, and contracting. Then suddenly, you realize that you did not clearly and formally define expectations for performance, measures, score-carding, communication, performance improvement, and corrective action. How will you control this beast?
First, do some reflection on your business. What value, service, or product are you selling to your clients? Is the nature of your market place and competition dynamic with compressed timelines and high volatility or is it more relaxed with a slow-boat modus operandi? This element and many other business rules will determine how you choose to measure performance and success in your supply chain. Functional areas from Electronic Data Interchange (EDI) integration, freight invoicing, status tracking, timely acceptance of orders and load tenders, and communication of all information related to your supply chain is fair game when considering how to manage relationships with carriers.
The key to keeping a strong and positive relationship with your carrier partners is setting realistic expectations early enough in the procurement process. Make sure to have clear expectations for measurement types and frequency, time period, intent of the program, improvement, and corrective action processes toward mutual benefit. If there is value to the partner beyond retention of your business, you will be much more successful.