Saturday 22nd Oct 2016 - Logistics Manager

Service levels are critical

Glenn Lindfield is adamant that maintaining service quality is a critical issue. “You can’t afford to reduce the quality of service.” In fact, he says: “Our service levels have risen since we created KN Drinks Logistics.”

Operating a network is obviously a riskier business for a 3PL than running a dedicated contract. But getting customers to pay a realistic rate for the service has been an issue in shared user operations in the past, and pressure on margins can degrade service levels leading to a cycle of decline.

However, says Lindfield, this is far from inevitable. “Where we have come up with innovative solutions, then customers have been prepared to pay the rate for the service.”

David Frankish says: “If they do then it is a very dangerous route to take, as the best and most valuable commercial relationships are based on providing a competitive and first class service – not cost at the expense of service. At NFT we look to provide our customers with the best of both worlds – the best possible service at the lowest possible price.”

Michael Conroy of Palletforce says: “Transport can sometimes be seen as a commodity, so price is always one of the drivers regardless of the economic environment. For operators the key is to be competitive but also to target intelligently and put effort in to understand the customer’s real issues. By having the expertise to understand what they do, the network is able to develop innovative solutions to improve the efficiency of the customer’s business, achieving value for all parties without compromise.

“The cost of failure is often an unseen cost. However, the impact on a business of poor service can be dramatic. It is important for everybody that every effort is made to avoid trading off service against perceived short-term gain. In our experience, networks can often lose clients on price only to regain them once the impact of reduced service levels becomes apparent. In the end, good service is what keeps a customer’s goods moving around the country, collected and delivered on-time, efficiently and without damage.”