Holste Says: While project scope varies from the relatively simple to the technically complex, price is most often the determining factor in vendor selection. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

After having been in business for a few years, most logistics executives and DC operations managers have gained considerable experience with project RFPs and vendor selection exercises. While project scope varies from the relatively simple to the technically complex, price is most often the determining factor in vendor selection. For some hard to define projects, prospective vendors are asked to provide concepts and solutions but are often unwilling to provide real information on which to base a decision. And then there are some projects where business cultures are obviously mismatched – progressive verses conservative thinking.

Years ago when Dan Gilmore and I were working at Forte Industries www.forte-industries.com, a large well established material handling design-build system integrator, we were fortunate to successfully win new system business from a process that was remarkably grounded in collaboration, honesty, and open-mindedness. At the time the customer (a large national consumer goods retailer) was consolidating warehousing and order fulfillment operations under particularly challenging market circumstances into a new built-to-suit facility. The company recognized the need to upgrade their manual order fulfillment operations to include higher levels of technology and automation. They organized an internal steering committee to help them decide what kind of project partner they needed and then to facilitate the process to select that partner. The resulting process was uniquely designed to lead to a decision based on solid information and realistic expectations.

Making the Final Selection Using Collaborative Workshops

Beginning with 6 to 8 potential material handling system providers, RFPs went out to 4. When the selection was down to two finalists, the real collaboration began. Instead of relying on a written proposal, the decision-makers based their selection on a series of collaborative workshops. The selection criteria had been decided carefully and were communicated clearly. The process brought people at all levels together for dialogue and discussion – including a CEO-to-CEO meeting.

This all made sense, because what they wanted was not just another system vendor bidding to a specification where all the decisions had been made. They wanted (needed) a creative and integrated solutions partner who would be able to think with them through all the changes and challenges to come. Going forward, they knew that the “right” solution is only right under current business and market circumstances and must be re-evaluated and in some cases, redesigned as those conditions change.

As the selected design-build provider, coming out of this process we felt ready to hit the ground running because the partnership had already begun. The relationship had a good foundation and we could move forward together. The totes>>Isotoner (www.totes-isotoner.com) 450,000 Sq. Ft. DC and corporate headquarters project (see pictorial illustration) was very successful and, after a few system upgrades and modifications to accommodate e-commerce and additional product lines, it is in its 15th year of operation.

Final Thoughts

If only more selection processes worked along those lines! Just think what that could mean for logistics companies dealing with constantly changing consumer dynamics and their competitive position in the global marketplace.