Do companies ever think of unloading services as an area where money can be saved? Some do, but most retail and wholesalers often overlook this essential service as a way to reduce their supply chain costs. Some companies assume more money is saved by using "lumpers" or internal employees to unload. But think of all the risks a business assumes when using internal employees to unload trucks - product damage, equipment damage, property damage, workers compensation, benefits, management costs, training costs, recruiting costs and, usually, hourly wage payments. Why not use a third-party unloading service to help a retailer/wholesaler eliminate risk and create a positive financial situation?
By using such a service, a retailer/wholesaler typically receives a rebate. The fact is that a third-party unloading company gets paid per load, so the more efficient it is the more financial reward. In this area of business, efficiency and cost are paramount.
Using a third-party unloading service provider can assist retailers/wholesalers to not only realize greater rebates and lower costs but improve efficiencies in unloading processes.
First, conduct a thorough analysis of your internal unloading and backhauling processes. Second, investigate rebate levels and thresholds based on market conditions where third-party unloading service rates are set by geographic region. Third, seek out high-quality suppliers who have the appropriate tracking technology to manage reporting of unloading processes. Finally, recognize the benefit of raising unloading services to the same level of importance and efficiency as other phases of your business.
Customers See Value
AHOLD, a major international supermarket operator, recently chose a third-party company as the sole provider of unloading services for three distribution centers, displacing the grocer's two incumbent providers. AHOLD realized a significant increase in rebates and was able to negotiate better rates than having three separate providers. Norm Haberl, AHOLD's vice president of warehousing, says, "The evaluation of whether we could benefit from consolidating our unloading operations under one service provider was very thorough and detailed. We used an external sourcing company who did much of the legwork up front, building a solid understanding of each distribution center's unique characteristics but also recognizing opportunities for leveraging common processes and expertise. As the business requirements and financial metrics were developed, leading suppliers of unloading services were brought to the table with a clear view of our expectations, qualitatively and quantitatively.
"From an implementation and execution perspective, we experienced a high level of responsiveness and flexibility as we integrated the new unloading service into our existing operations. We look forward to a relationship that drives continuous improvement and lower overall costs within our supply chain."
Brookshire Grocery Company, a Texas-based supermarket chain with more than 150 stores, had a similar experience. Scott Reily, Brookshire's vice president of logistics, said this about using a third-party provider: "We were and are very confident in our provider for unloading services, but we have learned through previous initiatives that competition is good. This particular initiative reinforced our confidence that our current provider was being cost effective for our business. We also learned through the process that if we changed some of our procedures we could reap even more benefits from our vendor relationship - benefits that will add to our bottom line."
Innovative Tracking Systems Paramount
It is imperative to seek out an unloading service provider that has a strong tracking system and industry experience in order to ensure ease of transition. A good tracking technology measures the efficiency of the unloading process which ultimately decreases supply chain costs.
The bottom line: be sure to implement a solution that provides a process that is centered on productivity and supported by high-quality information technology that eliminates waste and reduces costs.
Most retailers and wholesalers are looking for ways to cut their indirect costs. Whether it is consolidating use of suppliers or taking the "lumper" out of the equation, it's worth it to look at providers of unloading services to help decrease supply chain costs.
Source: TopSource LLC
Timely, incisive articles delivered directly to your inbox.