Background & Brief
The client — a leading provider of ‘powerbrand’ health, home and hygiene products — wished to benchmark their contractual arrangements and ensure their logistical costs were in line with the best the market had to offer. SCALA had been involved in the original tender process and advised upon a review clause to ensure that such benchmarking before the end of the contractual term was permissible. According to the terms of the contract, the benchmarking process had to be demonstrably fair and able to show a like-for-like cost comparison.
SCALA advised and assisted in the running of a Request for Quotation (RFQ) process featuring select 3PL providers with excellent credentials in running similar logistical operations as those required by the client. We advised on the data required to enable a like-for-like comparison and assisted in the collation and presentation of the following:
- Order data collation
- DC centre capacities by flow
- Storage requirements
- Outline intake levels and collection requirements
- Despatch and added value volumes
- Quality Requirements
SCALA then analysed all of the submissions and advised which of the proposed solutions could be considered a “fair” comparison as detailed by the contractual obligations.
Benefits & Results
The client gained significant cost and other benefits through conducting the RFQ Process:
- Immediate reduction in logistical costs of +10%
- Improved contractual terms in relation to optimisation of orders
- Strategic engagement with alternative providers
- Enhanced business continuity capability
The client achieved all of its business goals and was able to modify an existing logistical contract to deliver best value thanks to SCALA’s proven contract logistics methodology.