Love me (my) Tender...Updated 10 Years on (Return to Tender)

My thanks to Jim Tompkins for inspiring me to update the title of this article!

To be fair I am not a particular fan of Mr. Presley, nor do I wish for those tendering for business to never let me go (but a long term value adding contract might be acceptable). Additionally, I am not so sure that any 3PL has so far made my life complete (but to be fair there are some really excellent providers out there).

So, what is the Logistics Procurement Chief Witterer going on about now?

The whole process of tendering...whether it be e-enabled or otherwise.

So, I have completed my internal consultation with my Stakeholders, worked with them to closely define what the scope of solution needs to be, designed a list of (what I feel to be) easy to answer questions in the eRFI and then....well we begin to have problems.

Now the reach of e-sourcing solutions (in terms of number of suppliers) has now become quite phenomenal, when searching on even tightly defined criteria you may come up with several hundred 3PLs that have an indicated interest in the service and geography you are seeking.

So the sifting begins, we make a selection of the big providers and maybe bring them in pre-tender to determine what the market capability and interest is. We issue the prequalification, now perhaps we are down to 50% of the original invite list - and then we begin to long short list for the detailed phase of the eRFI/eRFP. (I am beyond 100 e-sourcing events now...)

We have attempted to engage with the major providers, have been pragmatic and only asked those providers into the process we are interested in (lets be clear for a large scale FTL tender there will be many interested suppliers, for in country distribution/specialist services less so).

We then issue our eRFI into the ether and wait with pre-Christmas like excitement for the results to come in. Soon "ping ping ping" there are lots of interested parties, so we click into the responses...and then we begin to understand that Santa Claus just has not read our faithfully penned letter, its not just a case of batteries not included but there are whole parts of our presents that are just missing.

I, like others, do have a set of testing but reasonably standard questions within eRFI's. they cover important matters such as Information Systems requirements, question to assess Project Methodology and implementation prowess; Health & Safety, Employee Management and Engagement, and Insurance, KPI's and Draft Contract.

Now hear this: the worst responses I have had to these include "-" (yes that's a hyphen), and "N/A" or that time honoured favourite "TBC"

Now, its clear I am not going to take an answer ignored or unanswered lying down. The great likelihood is that I am not going to move the 3PL forward in the selection process. Lack of compliance here does point to lack of compliance in the implemented solution. (Its a case of if you're not bringing me wine, chocolates and flowers at this stage of the romance it just ain't going to get better if we form a more lasting partnership - note well - I am not seeking romantic inducements as a Buyer to make a decision - I am fully aware and signed up to company procurement ethics!)

Finding myself in a mild procurement huff, I discount the businesses (even large scale global businesses) that have failed to take my test properly.

But am I right? Growing up I remember an age without computers, smart phones and tablets were only known for curing headaches...however, we were information famished - to research for your assignments you went to the library and read things called books to get the information you need to write into your assignment (fountain pen not quill I'm not that old).

I remember production planning a complex refinery and factory with the aid of only some graph paper, a print out of order requirements, a pocket calculator and a white board and marker pen...Oh I nearly forgot the essential aid - my BRAIN!

When searching for haulage suppliers I would park up outside of ports (I think I may have opened myself up for a few ribald comments here but I trust in LinkedIn) and take down the names and numbers from the side of the trucks. I would ring people I knew in the industry and ask for recommendations - I would trawl books and magazines to build up a database of prospective suppliers.

However, I suggest that we are now clinically obese in respect of the information we have at our fingertips, it is so easy to contact so many suppliers - and the reality is too many.

From a 3PL perspective they are coping with a flood of e-tenders and those surprisingly still written on rolled out wood pulp. (the tendering platforms I utilise awards €Billions of logistics contracts each year) and in this age of information gluttony a new approach is needed.

What's the answer?

Many questions asked in an eRFI are pretty standard for all concerned, so my initial suggestion is for the e-sourcing solution providers to coordinate a list of standard questions that can be answered by the 3PLs just once, we can then add supplementary questions - but the burden for the 3PL is reduced.

A Shipper driven solution could be a forever open eRFI that would allow 3PLs with an interest in working with your business to complete at their relative leisure.

As a Buyer I need to become less reliant on the e-sourcing tools database of suppliers and return to some of the market making practices that were really about intelligently engaging with suppliers prior to a tender.

Of late I have had the privilege of helping 3PL's respond to customer tenders.

Oh Lord.

Clearly, I cannot reveal names - but the sheer ignorance demonstrated by some Shippers astounded me.

• The lack of key product, customer and distribution data.
• The failure to provide any detailed view of the processes they seek to outsource.
• The ridiculous timescales.
• The clarity that no one with any true logistics knowledge has been anywhere near the tender document.
• The demonstrated failure to define what does good look like - anyone else like a few clues to find the answer to a difficult question?

I have always tried hard to over communicate, to provide ample data and most clearly to provide as much time as I can for the 3PL to respond (although, the Buyer is not always in control of this timeline - prior neglect shortening timescale, or indeed any over-zealous use of procurement policy can be key influencing factors).

The most striking "miss" was the general failure to communicate the problem that needs to be solved, the change that the shipper is seeking and a view of why they have gone to tender.

"RTS"!

I also see examples of "RTS". What is RTS? Repetitive Tender Syndrome. A certain confectionary manufacturer is famed for the copy paste process - new year, same tender, same failure to persuade the prospective 3PL's that this time they are truly serious about. How much attention will such an approach garner from the targeting 3PL's? A tray full of lip service anyone?

But returning back to who should call who first?

Of course it would be positive for a 3PL to reach out to me also - but this rarely happens which is a massive missed opportunity on their part.

I have spoken to 3PL business development teams who are immensely frustrated with their prospective customers for not being open to detailed discussions during the tender.

They miss the point here.

By its nature a tendering process involves communications with many parties, a huge amount of data being interchanged and most of all the tendering process has to be seen to be open and fair and demonstrate probity in its execution. The Buyer will probably be either the sole or main contact for the tendering process. It is not a great time to request long and searching "side meetings" and most often it will be refused as simply there is not enough time.

But outside of the tendering process there is tremendous opportunity to engage with the Buyer, but due to the focus on the tender response "sausage machine" 3PL business development functions do not have significant resource to engage prospective customers proactively. This is a great shame.

Time taken to do this reduces the misfires and fluffs in any future e-sourcing processes and increases prospective supplier interest greatly.

Final Reflections

3PL's could help themselves, and most particularly those seeking to buy their services, by (as a minimum) giving Buyers clarity on what works for them, what data they need, what are appropriate timescales for a response.

Going further, stop living with lacklustre tenders from prospective customers and even, and I know this is difficult, beginning to bounce far more tenders back to the customers.

Or even this radical thought: Train your prospective customers on how to buy your services!

(LOGURU is developing a soon to be available product called "IGNITE", it is an eLearning platform in which we will seek to share wisdom on all aspects of logistics, and specifically share all the dark arts of logistics procurement - so we can help here - please contact me if you are interested!)

Physician, heal thyself!

In a recent study commissioned by Transport Exchange Group it was discovered that many 3PL's have a lack of maturity in their own procurement processes and functions - addressing this can be a path to the profitability they desire - but by moving their procurement function to be closer to their business development functions could reap significant rewards - if you want to know how - please feel free to ask!

Looking to the future, it is clear to me that the whole process of 3PL business development and the shippers buying process needs review. Here are some ideas:

• Standardise most of the RFI process - 3PL's could assemble a "FAQ" approach - agree it across the industry and then stop the repetitive question asking. Leaves more time for the really important stuff.
• In the digitised world, perhaps we need to be "tender ready" all the time - without the stretch to achieve good data. What do I mean? Could shippers have a continuous and dynamic statement of requirements, distribution data updated, requirements updated. Combine this with a countdown to when a tender will be issued. This could help 3PL's "front load" the work and responses.
• UK Government continues to collect headline distribution data from the industry. The UK Government report says "30% empty running of HGV's". The 3PL approach seems to be to not understand the balance of flows of the overall business, it certainly does not seem to target business to provide a better balance of flows. They remain in the contract silo overall. There is unrealised profit in this, certainly there is an opportunity to tell a great story about sustainability too. But 3PL's, to these eyes (and I keep on looking) do not seem to engage here. Stuck in the trench, moaning about lack of profit and buying a few electric trucks to appear willing to address CO2 reduction. Harsh perhaps?
• It is clear to me that 3PL carrier procurement is less strategic, less coordinated and less mature than that carried out by many of their customers. There is an opportunity here - if 3PL's can raise their procurement game - they could demonstrate market mastery in respect of the element that is a commodity and focus then on selling intelligence, realisation of dreams, innovation and inspiration. The aim should be that a huge amount of logistics tendering should be outsourced to the 3PL's, the key to open this opportunity is visibility of process to the customer.
• The failure to leverage the 3PL big data also prevents proactive modal shift. If you have a full picture of flow - you can initiate new modes and services. When discussing this with 3PL's I often hear the excuse that "the customer contract will not allow us to do that", my simple response is challenge it. If you have a customer with "tin ears" send them my way. Additionally, seeking collaborative opportunities before a tender process commences could be illuminating. Imagine a 3PL as a logistics dating platform, matching those businesses with complimentary flows? Simply put, if you are a multi hundreds of million or billion 3PL - you really need to get all nasty and strategic with a big picture of your business.
• 3PL's need to evolve from dedicated followers of their customers fashion, and into a new world of shaping solutions to change the world. They could be the "sustainability engines" of the future.

If you want to understand how to write a logistics tender, or indeed respond to a logistics tender, feel free to engage with www.LOGURU.co.uk.