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Logistics service provider selection

4flow consulting assists with the selection of and negotiations with logistics service providers. The goal is cost-effective and secure supply contracting decisions.

Companies should assess the contracts they have with logistics service providers (LSP) on a regular basis. To ensure optimal processes and supply chain costs within an organization's own network structures, companies should question whether the quality of the service they are receiving is adequate and whether the providers’ rates are still competitive.

If the decision is made to award contracts to new providers with parts of or even the entire logistics network, choosing the right partner will require in-depth logistics know-how and the use of the right optimization and analysis tools.

Benefits of logistics service provider selection

4flow combines industry and process expertise with modules in our supply chain software 4flow vista that were developed specifically for transportation and transshipment. The results we get for our clients include:

  • Up to 20 percent cost savings
  • Performance improvements (better service levels, ability to deliver and the willingness to share information)
  • Optimal incentives for logistics service providers through service-oriented payment agreements
  • Full transparency regarding costs per provider and scope of contract

Solutions from 4flow

4flow assists with the entire process when selecting and contracting logistics service providers.
4flow assists with the entire process when selecting and contracting logistics service providers.

4flow supports the entire process of selecting logistics service providers and awarding contracts. Starting with the current setup of the logistics network, the transportation flow is examined and then the quantity structure and the regional structure are derived. Working with the client, future factors are worked into the quantity structure (for example possible rises in transportation volume due to higher rates of production). At the same time, the current rates are gathered and linked to the quantity structure to determine the current costs.

Finally, future rate structures are defined, the necessary documents (such as service catalogs) are prepared and a negotiation strategy is made. During the negotiations, 4flow supports the analysis phase by using a special RFQ module in 4flow vista. This makes it possible to compare rate sheets on an LSP level and a regional level, to simulate contract scenarios, and compare the resulting overall costs.

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