At Trym, we’ve worked on both sides of the fence in the logistics tender process.
We’ve been the eager provider, poring over the information, trying to work out what the prospect really wants in order to make the response both as compelling and deliverable as possible…
We’ve also run the tender process for clients, our focus being on setting out sufficient information to ensure the responders know what they’re bidding against, without presenting so tight a solution that there’s no scope for creativity.
When you’re in the heat of negotiations 3PL tendering can feel like a battle, no matter what side of the fence you’re on. As independent advisors, we have the opportunity of being able to take a step back and see the process for what it really is – an exercise in effective communication and collaboration.
Here are our top tips on how to have a more productive and rewarding tender process.
Running the tender as the 3PL client.
1. Your identity and values matter.
It’s easy to become focused on the service you are looking for – the network that you either have, or wish to establish, and what you want to offer to your stakeholders.
However, the way you run your business, the way that your stakeholders engage with each other and the values that you collectively hold are just as important. We believe that it’s important to set out how you run your business and your value set, in order for the 3PLs to respond to this.
2. Make the question answerable.
It’s very easy to make the data components of a tender a ‘quiz’, however, while it might be fun, there is little value in 3PLs sweating over how to piece together data to provide the information they need to be able to answer how they can best work with you and at what price.
3. Be open to left field proposals.
Whether it’s through flexing the parameters you’ve set out in your requirements or achieving your stated aims in a way that you hadn’t envisaged, being open to alternative solutions is a key part of finding the ‘right’ solution.
If your thinking is limited to your pre-conceived, or current, ways of working then you will only polish your current solution through the tender process. Being open – and challenging your thinking – might deliver a step change in performance.
Responding to the tender as the 3PL provider.
1. Be transparent about assumptions – don’t shoot yourself in the foot.
While you might hope that those comparing your responses drill down into the detail of what is driving the costs within your response, that might be a forlorn hope.
It’s far better to set out how low the costs could be if a set of (unlikely) assumptions are met, and then place your best view of what the costs might be, rather than respond with only your best estimate.
2. Demonstrate an interest in the company.
However subtlety you wish to, show within your response that you have done something to find out about the company you are pitching to.
Visit a store, buy their products, wear their products, use their products – whatever is appropriate, show that you have invested some discretionary time into them, and are not just ‘knocking out’ another response.
It’s not a case of flattery, but a demonstration that you understand the business on a deeper level.
3. Make your response easy to navigate, for any reader.
There will be a select group of people in the tendering company that will read every word you write and every number you set out in order to fully evaluate your response. However, there will also be a far larger community of people in the organisation that will have to read your response, and may not be as engaged as you might hope.
Providing a response that is easy to read, that sets out a vision for the proposed solution, and explains it in a way that a non-logistician can understand is vital. This might be the Exec Summary or a ‘Solution Overview’, setting out how the solution meets the business needs, and what it costs.
An independent approach.
If you’re in the process of outsourcing some or all of your supply chain to a third party provider, our independent advice and analysis can help you make the right choice for your business. To learn more about our 3PL tendering support (and other services) feel free to reach out for a chat.
About the author
Jon’s client work extends across Manufacturers and Retailers with a scope that covers high-level supply chain strategy through to detailed operational reviews and performance improvement.