Procurement + logistics

One of the same

The purchase of logistic solutions is one of the most important necessity in today’s companies. They are different types of services with several complications to be evaluated and mostly what we need is the reassurance of being on time. So, from the procurement view, to evaluate the perfect medium point between cost and quality can be sometimes a little tricky in my experience.

Logistic services are needed across the whole supply chain in order to be able to produce what’s needed in the time needed to get profits. Starting with the acquisitions of raw materials to the management of raw material stocks, production plans, final product inventories, delivery of finished goods and all the additional logistic services in a production site or administrative offices. Logistics is always on the top 3 expenses of any company.

Throughout the entire supply chain production costs are affected by logistics costs: stocks, trucks, in house handling, material movements, warehouses, lead times, etc. This is why is such an important thing to find an evaluate several suppliers in order to have options and mixed costs that keep us as close to our ideal or theoretical production costs.

As in every kind of negotiation, but specially any including logistic processes, we need to take into account:

-Big Picture. The product must be built. You need to think about packaging, raw materials, manufacturing details and warehousing.

-Fin print. Don’t forget to take into consideration the Terms and Condition of any negotiation. TCA (Total Cost of Acquisition) might be better than a cheaper option considering all. Does a provider of procurement logistics offer auditing services, ability to access additional resources and other specific details?

– Delivering the product. Finish product strategy in order to reach the maximum customers at the lowest investment.

– Purchasing Strategy. Take into consideration all variables that can alter TCA. An optimized purchasing strategy can collect materials from a variety of suppliers, analyze current supplier market trends, and select the best means of obtaining materials at the lowest prices, without sacrificing quality. This also drives competitive advantage among suppliers, helping to keep prices from skyrocketing.

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