How do you evaluate your logistics procurement and sourcing?

Evaluating logistics procurement and sourcing is vital in today's business landscape. To excel, follow these steps: Clear Objectives: Define logistics goals precisely. Assess Current Status: Gather procurement data. Tailored Strategy: Align procurement with business goals. Supplier Selection: Choose suppliers carefully. Build Credibility: Evaluate and gain trust internally. Continuous Improvement: Monitor, cut costs, and enhance service. Procurement logistics manages sourcing, policies, and strategies. By following these steps, optimize your supply chain for success.

Your key performance indicators (KPIs) should be determined. You will assess the performance of your suppliers using these indicators. Cost, speed, quality, dependability, flexibility, and sustainability are some typical KPIs for logistics procurement and sourcing. Gather information about your vendors' performance. Many other sources, including invoices, delivery records, and customer satisfaction surveys, can be used to gather this information. Examine the data to find areas that need improvement. You can use this to determine where your suppliers are doing well and where they need to do better. They will be better able to comprehend your expectations and take action to raise their level of performance as a result.

Efficient logistics procurement and sourcing play a pivotal role in any organization's supply chain management. The ability to secure the right products and services at the right cost, while ensuring timely delivery, can make or break a company's competitiveness. The key elements of evaluating logistics procurement and sourcing are to optimize these critical functions. 1. Supplier Performance Assessment 2. Total Cost of Ownership (TCO) Analysis 3. Data-Driven Decision-Making. Evaluating logistics procurement and sourcing is a multi-faceted process that requires a strategic and data-driven approach.

What I did is to define vision and mission in the local context. After that we did VSM and established PP which allowed robustness, simplification and continuous improvement principles. Objectives, commonly adopted, had to be in VUCA concept. Two levers are essential: permanent learning and empowerment of the team. Transparency and trust in team, project management approach are also very important pillars in the process.

Clients form and shape your objectives and expectations. You take it from there and try to fit the requirements it into your business model.

You must be ready to develop your partners and commonly share the perspective with them respecting full partnerships principles.

Good supplier is the one who shares same values as you in terms of quality, sustainability, flexibility etc. Values of cooperation needs to be monitored periodically after initial approval. Those matching values needs to be two ways street "learning and developing from eachother experience" and not "punishment tactics".

I think there is little to add to the above. However, nothing is mentioned of pricing negotiations, from there you define and agree on the quality and the standards to correspond to. Lead time is very important. Of course trust is imperative for both parties, you may build it by visiting in person or having enough research made on the company, accompanying it with enough video and phone calls.

vendor evaluation is the second stage of sourcing. We always have to have potential vendors besides approved ones. The approval evaluation process includes some sort of criteria according to the prerequisites of the project. In addition to the mentioned criteria, vendor location is also an important criterion for logistics operations, not only for cost but also for agility.

An additional consideration is necessary for industries with strict regulatory and compliance requirements, such as healthcare. Therefore, supplier assessments should include rigorous vetting for certifications and compliance history.

Very important but process should be very well balanced. SLA is the very powerful tool. In some fields better perspective we could expect from CPPA.

It's the hardest part of all. You should constantly monitor the process. The quality can be checked by various ways: 1. Independent experienced party. 2. By video calls (bearing in mind that the supplier has technological department in place) 3. In the intermediate warehouse with your supervisor. 4. At the arrival (your warehouse) 5. You may also check thoroughly by insisting on international standards compliance check with relevant institution at the place of production. Other methods of course do exist, these are the main ones.

Especially in service agreements, well-established communication will eliminate most problems in advance. To monitor performance, IOT and other technological means will shed most of the light on processes. Also, with the help of some geological reporting services, it gives some critical information in advance by not relying solely on the vendor. Lastly, regular audits also should be established to maintain the quality of the service.

It is ultimately important. Development of reporting tools based on Data Lele, data warehousing (ex. in Power Bi…), tools for automation are very helpful to achieve efficiency and eliminate vaste.

This should be constantly monitored and appraised as the prices continuously change. Some more efficient logistics methods appear and you should be always on the alert and cost best for you and your clients.

The spend analysis structure should be prepared prior to agreements in the RFQ stage. Otherwise, there may be many unforeseen costs that may affect the budget negatively. Besides that, efficiency opportunities should always be analyzed to optimize the cost-benefit ratio. In addition to that, peer reviews will also be a good opportunity to gain fresh information about the industry. Lastly, as always, communication here is also an essential factor to improve efficiency.

The significance of trade compliance in logistics should not be omitted. Effective supply chain management hinges on adherence to international trade regulations, ensuring seamless cross-border operations. Failing to address trade compliance can lead to costly delays, legal repercussions, and reputational damage. In an interconnected global economy, a robust understanding of trade compliance remains fundamental to a well-functioning logistics ecosystem.

This is advisable however your may not be willing to sacrifice the existing routes and procedures for something new and obscure. Moreover you would be wary of potential risks of any innovations you may implement. Nonetheless, it's highly commendable to check regularly on what is new out there and of course, set regular kpi to discuss with your logistics department.

I practiced in my career to use internal, external and benchmarks from completely different industries. Innovations that can enhance your logistics efficiency, quality, or customer satisfaction should be permanently following and shared spread both parties.

In addition to prior comments, benchmarking with potential vendors and prior agreements may also give a picture of the current status. Here is the danger of being blind after believing the processes are well enough in comparison with our initial expectations. Moreover, best practices may also give a fresh perspective. But this point must be considered that not every company is the same, so not every prescription is suitable for all.

Sourcing focuses on supplier identification evaluation, and selection, while procurement covers the entire purchasing process from requisitioning to payment. Cost, speed, quality, dependability, flexibility, and sustainability are some typical KPIs for logistics procurement and sourcing. Gather information about your vendors' performance. Many other sources, including invoices, delivery records, and customer satisfaction 🔴 Some useful metrics : 1. Procurement Cycle Time 2. Vendor performance 3. Spend under management 4. Cost savings 5. Percentage of POs that are catalog-based

Overall I feel this article covered a lot of critical areas necessary in the sourcing and development of a logistics strategy. The primary takeaway all industry professionals should have is to remain open and transparent. In the last four years alone, I have seen where the most unlikely relationships have been able to help sustain my logistics strategy and support my organization when routes became constrained.