How To Choose A Logistics Service Provider?

If you do not select a logistics service provider well, you can waste the market because you do not have an efficient supply chain, from your suppliers to the production plants and from these to the markets where they are selling their articles.

Excess cost may be incurred for failure to deliver timely and in good condition; in addition to the risk of losing the merchandise due to not following up properly to avoid damages or not having the insurance of conventional cargo handling and other mechanisms that protect the capital. Likewise, traumatism are generated in the operation of the companies.

To avoid these disadvantages, the criteria to be taken into account when selecting a logistics service provider is very important:

1st: carry out an evaluation that helps to identify the characteristics of the current logistics process, such as service levels, technology and information systems, to better understand how the logistics operator will support business work.

2nd: identify the advantages and disadvantages of carrying out this outsourcing process, what risks are exposed and under what parameters you want to assume them or invest in action plans to mitigate them.

3rd: must take into account and evaluate in the most conscientious way possible what are the needs that are intended to be covered when starting a new employment relationship with an operator. Deciding what is required to contract and what should be required from the operator is what, will allow choosing the most suitable service provider for the company.

4th: It is also important that the logistics operator not only knows about his business, logistics and supply chain, but also that he cares about understanding the business of his clients and their particular characteristics and needs.

5th: Reputation is a fundamental criterion to determine if it is worth working with a specific logistics provider. During the presentation of your services, a supplier will present some favourable or unfavourable references for our company.

Finally, when hiring a logistics service provider, it must be borne in mind that this can and should be a long-term relationship, avoiding switching between them frequently due to multiple factors such as cost reduction, one of the main benefits of outsourcing, It can be affected as well as other processes such as the consolidation and development of the company.

The Fourth Industrial Revolution. Logistics 4.0

Logistics has been the fundamental basis of the evolution of man, as modernity was arriving, production processes had to change, which led to humanity advancing as its logistical processes allowed it. First, the steam arrived, with it the first machines not moved by human or animal force, the large-scale production created the industrial world, then came the electricity, the chain production applied to the industry, and then the electronics appeared, the technologies of information and automation of industrial processes.

Currently, we are in full adoption of a new revolution, the Internet, the microchip, the digitalisation of processes, the cloud, and artificial intelligence. For the first time we must not develop a logistics aimed at tangible elements, now we also need to optimise the processes of intangibles, which means nothing more or nothing less, that a new transformation of production systems is approaching, the fourth industrial revolution is to arrive.

The industry 4.0 is breaking: machines, tools, operators, warehouses, packaging, the entire chain will be interconnected, the intangible will be as important as the tangible, the information will be increasingly valuable, terms such as data mining, Big Data, hyper-connectivity, 3D technologies, BIM platforms, smart energy, Smart Grid, Smart Cities, biomedical technology, electric mobility will be part of the daily life of the new generations of UK biggest logistics.

But, do not worry, if you are unfamiliar with some of these terms do not get scared, these new platforms are in the process of implementation and in a few years when these are already part of the day to day their use will be adopted easily, as well as the dynamics of new technologies they will always be aimed at making their manoeuvrability easier than the previous one. The same has happened with other types of technologies such as the internet, an invention that was born as a tool of ultra-secret communication during the cold war and today is a system used by older and older children.

New technologies should not scare them, but if motivated, their processes should adapt as quickly as possible to the fourth industrial revolution, the 4.0 will not wait, their logistics department should support the implementation of new technologies, carry out induction programs to staff, and try that the new personnel already bring some type of knowledge in these processes.

If something has made history clear, it is that the peoples that are able to adapt in less time to the different technological revolutions are called to lead the world in the following years, on the contrary, history has also shown that the punishment for whom is not able to get on the bus is underdevelopment.

Supplies On Demand

In online purchases, it is expected that physical stores will continue to exist for many years. However, the configurations within these spaces have changed considerably. Therefore, food distributors are looking for new ways to fill their stores with products efficiently. Deliveries adapted to stores are the ideal solution.

The retail food distribution market continues to be dynamic and consumers demand fresh premium products when they need them. Stores are also expected to remain open for more hours, so inventory replenishment activities will often take place during periods of increased purchase activity.

In addition, consumers want to have greater diversity when choosing their products. This means that deliveries from warehouses are getting smaller, with more frequent replenishment activities. The increase in online purchases, the concept of "dark" or "dark" store and e-commerce are also increasing the complexity of the supply chain for food distributors.

Increase Of Multi-Store Format

One of the most important trends affecting food distributors is the growth of the multi-store format. This issue currently occupies a prominent position in the agenda of the operators of warehouses and distribution centers and for good reason.

Until a few years ago, the basic layout for a store, such as a supermarket, varied very little from traditional design. However, since that traditional and common approach has been rejected by the demands of modern society.

Now the products can be purchased in numerous establishments, from gas stations to express stores, through conventional supermarkets and "ghost" stores. This puts significant pressure on the order preparation and distribution process since the final delivery point must be taken into account.

It is expected that this diversity will continue to exist according to the IGD study, which highlighted that: "The physical store will continue to play an important role in the future of purchases" but those "store schemes will need a greater differentiation counterbalanced by the need to maintain an efficient supply chain.”

With this in mind, distribution centers are looking for new ways to increase efficiency, reduce delivery times and reduce transport costs.

A Pioneer Field

Deliveries adapted to stores are often considered the ideal solution. This method consists in preparing the pallets or the cages in the CDs in line with the specific scheme of the final store. This creates a very positive impact on the inventory preparation and replenishment process since these processes are simpler for stores.

The main advantage of the gas adapted to stores is that CDs can prepare a pallet or a cage accurately, regardless of the layout of a store. The replenishment process could be carried out more efficiently through the automation of the forklift stacking process. One of the reasons is that the individual phonograms of the stores can be taken into account. 

The collection of automatic boxes (ACP). "ACP technology allows us to automate the entire system flow, this ranges from the reception of the pallets of the supplier to the preparation of pallets of combined boxes that are sent to stores.

One of the main components within the ACP is our Load Programming Logic (LFL) software, which calculates the most effective preparation of the pallets. LFL transforms shop orders into a series of forklifts, pallets or cages. It takes into account the characteristics of the store and the product so that the products are stacked in a stable manner facilitating the process of replenishment in the store. "

The creation of pallets using the LFL also means that stores do not need operators to divide the pallets into smaller sections. This saves time and reduces costs. In a traditional manual operation, pallets have to be divided before they can be used for stock replenishment. This occurs because the manually prepared pallet contains different goods from the store.

However, when preparing pallets intelligently, the division process can not only be improved but potentially eliminated. In addition to reducing replenishment costs, you can free up valuable storage space. It can be used alternatively to improve the shopping experience for customers.

Optimization Of The Supply Chain

The advantages of an automatic preparation of the pallets with respect to manual preparation have already been recognized. We can include statements such as the following: "The automatic stacking method has a performance superior to the current manual stacking method. In general, we can conclude that automatic stacking software has a superior performance to manual stacking software in terms of forklift utilization and replenishment times. "

In addition to the layout of the store, LFL also takes into account the "limits of vertical orientation, stacking, stability, complexity, allocation, and distribution of weight, as well as the weight limit of the forklift". These considerations are crucial in a supply chain solutions in UK where "container loading is a paramount function, as insufficient performance generates unnecessary costs and unsatisfactory customer service".

The main benefit for food distributors is the replenishment of inventory in a very faster. Ultimately, products can be prepared on pallets in a way that satisfies their intrinsic value to consumers; always available on supermarket shelves.

The financial implications are considerable. If we rely on an average food distributor with 200 stores, store-adapted deliveries can reduce inventory replenishment activities in two to three hours per delivery, per store. This translates into savings of up to 20 million euros over a period of ten years. Transportation costs are also reduced by around 5 million euros in the same period. Buyers will always have their favourite products available and this is very important as product inventories are getting bigger and stores stay open for longer. The logic of load programming is the basis for the improvement that stores will achieve by passing manual processing from a warehouse to automated processing.

Through automation, the warehouses will benefit from an efficient and flexible operation, as well as a reduction in transport costs. At the same time, the efficiency in the store will be increased and the food distributors will be able to improve their competitive advantage even more.