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Question in: Logistics and Supply Chain

Short term vs long term relationships

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The VUCA environment affects pricing, by changing the conditions of the market, with more frequent tenders processes opportunities for lower cost can be uncover, however in the industry long term relationships and collaboration has been the corner stone for guranteeing a base cost faciliatating planning.
Is procurement for logistics needing to become more transactional or continue to stand on the long term thinking that has always accompany partnering with suppliers?

Procurement Operations
Logistics Management
Long Term Business Planning
Victoria Cobos Morantes
15 days ago

1 answer

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The economic and competitive environment is indeed changing, and having an effect on procurement for logistics. In my view and experience over the past years, I see exact the opposite happening. I have been active in the world of manufacturing for many years - and in that environment longterm partnership approaches have been present for a long time. In the world of logistics I have experienced for years a totally different procurement approach which was very much transactional.
In recent years and in engagement with many customers, it is clear this is changing as well in procurement of logistics which is moving much more in a partnership as well!
The only way to stay competitive in a VUCA world is for partners cooperating with each other, identify opportunities for value creation and engaging in projects to deliver value to the partnership, regardless the term of the contract binding both parties to each other. There is still an enormous amount of value to be created and a world of opportunities if 'customer' and 'supplier' look at things in this way and are not held back because of looking at things solely from their own perspective.
I have personally experienced relations developing in this way, resulting into much greater benefits for both parties rather than running a tender process every few years and/or negotiating on decreasing the cost rather than increaing the value.

Gerry Bosmans
15 days ago

Have some input?