The Sum of Small Details Makes a Big Difference

Faced with the current economic landscape, centralizing decisions, activities and corporate management can trigger a series of problems in the different spheres of a business. Developing areas internally that are not part of the core business can impact the effectiveness, agility and profit potential of the company. Such is the case of storage activities, inventory control and transportation management.

By having an ally for logistics services, companies gain efficiency and improve performance and agility, which results in the satisfaction of the final customer, since they receive their products in a timely manner.

But this can become a real headache for both sides, both for you and for your logistics partner. The small details, if not taken care of, will be what will cause the biggest problems.

Therefore, it is important that you focus on the most critical details of a negotiation without neglecting points such as times and delivery terms, measurement mechanisms, montract,  and responsibilities. This set of fundamental elements is far from exhaustive or perfectly complete but it contains a large part of the negotiation and implementation of operations outsourced to a logistics operator. When difficulties arise, it is extremely important to be clear about who should be in charge of solving the inconvenience, bearing the expenses and costs generated by the problem, informing customers, coordinating actions and solutions, etc. Usually the contract, drawn up by lawyers, establishes who is “at fault” and who should pay the costs, but operational and mitigating elements are often left out. I recommend focusing on these types of emergency protocols and procedures, so that in addition to identifying who pays the bill, it is also clear who solves the problem and how they should do it.

It is normal for the purchasing and legal area of ​​companies to intervene in a negotiation as spokespersons for the operational areas but this sometimes is a mere contractual procedure in search of the best negotiation for the parties, focused on cost and lower risk, and leaving aside the commercial element and, above all, the product to be treated. 

The logistics sector involves many edges that not only include the distribution of products to known channels on established routes but also the negotiations that each manufacturer has over its products with those who are going to market them. These details are generally omitted because it is thought that logistics providers, as specialists in the sector, already know everything about your product.  The internal logistics cycle and negotiations with your marketers, however, are not considered. This leads to unforeseen execution times and insufficient reaction times, generating a lack of control and possible errors in the logistics process. It is then that the real conflict between the parties begins, which usually leads to the dissolution of commercial contracts. 

All of the above is the result of omitting operational details, with the excuse that the company was approaching experts in the field or sector, hoping that they would know everything related to the logistics of the product. The phrase, “ is in the details," is so true. When we provide information without contextualizing it, without analyzing its origin, its consequences and the details that surround it, we simply obtain data without the possibility of establishing a critical related judgment. Therefore, in practice, it is difficult to find clarity in the contracts about the possible operational variables that generate extraordinary processes or costs.

In my expertise over a couple of decades in the sector, the main reason for dissatisfaction among those who outsource their operations is that the service they receive is not only poor but also lacks context regarding their product and final customer. They begin a via crucis of changes in logistics providers focused on who will give them the service they expect at the best cost, resulting in an endless cycle of dissatisfaction. If that is your case today, it will be very important that you first analyze how well you know the internal logistics cycle of your product. What are the main variables you have had over time? What are the unique features of your product to understand? What are the negotiations you have had with your marketers or end customers? What are the time commitments and standards established in the final negotiations with your clients? If you are able to answer these questions in detail, you will be able to make your strategic ally understand what you expect from him and the service you need. The request for the services should not only be enunciative but descriptive, including  the main variables that you have elaborated.

Dicka Logistics has been characterized as a strategic business logistics partner, generating great business relationships, but as with any good relationship, you must have full knowledge of the parties beyond knowing what the business is about. What does the customer expect? How does he feel about this need for service? You must know the main characteristics of the product. All of the above is understood as long as you yourself know the answer to these questions and the great openness to communication that Dicka Logistics provides.