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Route to Market & Supply Chain Blog

10 Tips for improving performance through closer Logistics Service Provider relationships

Posted by Christian Cusworth on Thu, May 13, 2010

An open and transparent engagement with your LSP can deliver tangible business benefits in addition to a less stressed working environment; consider some of the following pointers in your relationships with LSPs.


  1. Information sharing: Be willing to invest in systems integration and visibility, be open and willing to share information.
  2. Partnership approach: Adopt the Logistics Service Provider as a business partner (not just another supplier) and ensure that he has a participative role in the S&OP process.
  3. Dot over burden the LSP: Avoid excessive KPIs and monitoring. Review key areas regularly, but give the Logistics manager time and space to manage his operations.
  4. Place an implant: (ouch!) Often a full time employee placed in the LSP can assist greatly in addressing day to day delivery issues and smoothing relations.
  5. Establish a feedback loop to S&OP: Often the LSP is the first to hear important customer and competitor information including in relation to performance and sales.
  6. Jointly assess market trends: An expansion upon point 5 that covers Logistics market trends and ensures an optimum route to market solution.
  7. Share the upsides (and the down sides): Reward successful performance and importantly the correct behaviour from your partners. If your key target is price or customer service, ensure that the LSP agreement is aligned.
  8. Say NO to everyone (sometimes!): This goes for all parties. If something is really impossible be prepared to say no, and likewise accept no as an answer. Don't be afraid to tell the customer no either. A strong relationship will develop through mutual trust in each others expertise. Better the occasional no then the frustration of ongoing broken promises.
  9. Stay flexible: Be prepared to update and improve working practices as you go, this provides the platform to deliver Logistics solutions that meet the ever changing needs of the business.
  10. Smile regularly. Don't forget there is more to life than huts, trucks and boxes.

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Tags: Logistics Service Provider, S&OP, Logistics Management

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