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How to assess the capability of logistics companies

When companies outsource the transportation and delivery elements of their supply chain to a logistics firm, they run the risk of customer dis-satisfaction, damaged goods, etc. They have to carefully select a logistics firm if they want their operations and customer relations to be on track. Here is how a logistics company’s capability is assessed:

How to evaluate a logistic company's capability

Good logistics companies have departments, which handle all the relevant supply chain activities. The departments are staffed with experienced and knowledgeable employees. They have logistics planning resources and capabilities to handle inbound freight, warehousing, customs management, fulfil orders and efficiently, distribute outgoing freight. They own and operate warehouses and ensure a door delivery of goods. Here are questions that can help to determine capabilities: -What is the inbound logistics process and what are the put-away practices? -How do they compensate if goods are lost or damaged? Will they reimburse manufacturing cost or invoice value? Is each shipment subject to a maximum liability? -How is the storage facility maintained and do the storage procedures conform to strict standards? -How is storage pick-time minimised? How are storage slots, pallets racks, flow racks, bin-shelving handled? -Is the warehouse layout optimum? Does the company have appropriate material handling and conveyor equipment? -How does the company leverage automation technology (pick-put-sort-deliver)? How are urgent orders expedited? -Do packing operations follow an industry standard? How many packing stations are there? How are bottle-necks handled? -Are the shipping processes reliable? How long does it take from the time of arrival of order to the time of the actual loading on truck for shipping? -How are the various transportation agencies like couriers, carriers and feet operators deployed? -Are miscellaneous and ancillary services like handling promotional items, cross-dock fulfilment, tracking of expiry date, lot control, invoicing, processing returns, etc., handled efficiently? -How is quality control practised for completeness and accuracy? Does the company conduct a statistical process? -How is inventory handled and controlled? How is transit status tracked? -Is the labour adequate? Is it skilled and continuously trained? -What are the safety and security protocols? -Is the heating/air-conditioning adequate? -Is the senior management experienced? Does the company have satisfied customers? -Is the technical infrastructure adequate and modern? (example: Warehouse Management System, Radio Frequency, Electronic Data interchange, and other automations.) -Is there a customer service department that functions efficiently?

Final word

Using the wrong logistics company can affect a company's reputation. It is best that the logistics firm researches well before signing the contract. Going with a new or partial-service logistics firm can be disastrous as well. Some of the leading logistics companies in the business are RCS Logistics, Europa Worldwide Logistics, Eddie Stobart Group and TDG Logistics.

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