Cost vs. Quality – You Get What You Pay For in Supply Chain Management

throwing_money_awayHave you ever been a member of a really great gym? Well I was a member of one for over eight years, until I was unable to resist that New Year special from cheaper gym. It didn’t last, though.  My cheaper option came with dirty equipment, broken treadmills, and horrible hours.  I quickly forfeited my deposit and returned to my old gym, and I realized that clean towels and reliable equipment was a luxury I couldn’t live without.  It was an expensive mistake – I thought I would save some money and ended up throwing it away.

My wasted money and frustration reminded me of an important lesson we all learned a long time ago:  You get what you pay for.

The same is true for your third-party logistics partner.  You may save a few bucks at first by going with the cheapest, lowest-frills option.  And it may seem like a good idea at the time.  After all, you operate on a tight budget.  But you may be taking risks of poor quality or shortcuts that could lead to expensive problems down the road.  As you’re making the decision on a carrier that will impact your entire business, be sure to ask these important questions:

  • Will my freight arrive on time? Time is money.  Your widgets need to arrive when and where you promised.  You can’t afford to risk late fees or lost shelf time for your freight.
  • Are you there when I need you? When I call, are you available, or do I get put through a menu of too many choices only to get disconnected and frustrated?  Can you answer my questions the first time I ask, or do you tell me you’ll call me back and then forget?  Let’s be honest, no one has time to be given the runaround.
  • Do you provide me with data I can use to proactively manage my logistics? You need the right data available to you in a way that you can digest and use to make decisions.  It has to be accurate, current, and convenient.
  • Is there an up-charge for everything? Make sure your logistics partner is not like a budget airline – charging for choosing a seat or printing a boarding pass.  Good quality should be all-inclusive.  You shouldn’t have to pay for reporting, auditing, or customer service.
  • Is my freight safe? Either on the road or in the warehouse, your freight is no good if it’s broken or damaged.  Make sure your carrier isn’t taking shortcuts that may compromise the quality of your product.  You should feel assured your products are safe.

Take the time to fully examine a third-party logistics provider before making a costly mistake, and make sure you fully evaluate the details of any offer.  You need to feel confident your freight and warehousing needs are managed with excellence so you don’t end up with a costly surprise.