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Supply Chain RFP

How To Make a Supply Chain RFP, Part 1

A well-crafted supply chain RFP (Request for Proposal) will contain information about the both the soliciting Company’s business situation and operation requirements, as well as information that you want to know about the candidate’s logistic service providers (LSP). We’ve previously addressed the importance of providing very detailed requirements, not just averages for inbound, outbound, and inventory requirements.

Your supply chain RFP is meant to solicit detailed information regarding the potential providers, examples of their experience with similar operations, and their proposed solution for the Company’s logistics management challenges.

·       Provider profile

Request a summary of items such as company history, ownership structure, and management team. You should also ask for an overview scope of operations and industries served in order to provide an impression of overall potential partner context.

·       Strategic direction

Solicit information regarding the providers’ competitive advantage, market or service concentration, and expectations for planned areas for future growth and investment to evaluate for cultural fit.

·       Customer base and experience

Request descriptions of accounts for operations of similar scope, requirements, technologies, or consignees. Ask about lessons learned to discern experience that can be leveraged to benefit your operations.

·       Financial stability

Seek evidence of revenue, profitability and balance sheet strength.  The Company’s finance team will require full disclosure prior to final selection and contracting.

·       Facilities and network

Require identification of the proposed facility or facilities, their location(s), physical attributes, dedicated vs multi-account, and lease termination.  Ask the provider for proposed layout of the facility and configuration of proposed equipment to determine adequacy of facility and competency of design.

·       Management and staffing

Have the provider describe the proposed staffing plan including specific key manager and staff bios and their plan for utilization of temporary labor (if any) to assess their understanding of requirements and planned productivity levels. Carefully evaluate the proposed manager and key staff as they significantly impact success.

·       Operations and processes

The provider should describe exactly how their services will support the business requirements including key process flow, special equipment or mechanization, and execution of day-to-day activities.  Use this input to evaluate their strength of operational solution.

·       Technology platform and communications

The provider should list the packages and applications they use across their organization for both warehouse and transportation management and the specific applications planned for this account. Supplemental information includes customer facing and communications platforms, reporting tools, direct interfaces with ERP systems, maximum transaction volume capacity, and other important Company needs. The internal technology team must be actively engaged in the solicitation and evaluation to ensure technology adequacy and fit.

Provider responses should demonstrate their understanding of the business requirements and provide evidence and examples that support their proposed solution. The Company should evaluate responses with the objective of selecting the right partner that offers the best cultural, strategic, and operational fit that they can effectively work with to resolve the inevitable issues that will arise during the course of the agreement.

In part 2 we will review additional sections of a well-crafted supply chain RFP.


Published in February 2016

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