Defining SLA through a global logistics services provider

October 19, 2016 - 3 minutes read
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Growing a business across the globe is impossible when its supply chain is not carefully constructed to ensure continuity in service and efficiency in operations.

A provider of network solutions for telecommunications operators and mobile service providers was having trouble meeting expected lead times. The company had been growing internationally and was becoming less able to manage certain of its logistics in faraway locations, so it decided to contract a global manufacturing and logistics company to help streamline certain processes. The company needed to describe its process and operations, which are complicated and very specific, so it sought Tefen’s help in writing three SOWs to govern its contracts with the logistics company.

Methodology

The first step was understanding the different processes at the company. The processes include warehousing logistics, receiving inbound material shipments, assembling components into products, packing outbound order shipments, and repairing products. The company has different departments overseeing each process and many of the departments are unaware of the others operations, making for a fragmented and complicated organization.

In order to understand the organization and create a big picture of all the processes, Tefen interviewed employees and managers in each of the different departments. Through the interviews, Tefen was able to see how the departments operated and connected, what each of their expectations were and what important details were missing.

During the interviewing process, Tefen also received a plethora of documents the company had already written about the different processes. While the documents were unfinished and unrefined, they were useful in helping Tefen understand where to start.

The second step was to begin drafting recommendations for the company in order to reduce its lead time and make its agreement with the logistics company more effective. These recommendations included ways to shorten and uncomplicate the processes, reduce costs and measure the performance of the logistics company through calculated KPIs.

Outcome

Tefen produced three highly descriptive SOWs that the company was able to use in negotiations with the logistics company. The SOWs provided a very clear understanding of the logistics company’s responsibilities, including:

  1. Step-by-step processes of the work it would complete
  2. The IT interfaces and other equipment needed
  3. Staffing and training requirements
  4. QA duties
  5. The service level expected
  6. KPIs and how they would be measured
  7. A disaster recovery and business continuity plan
  8. Billing and invoicing information

In negotiations, the logistics company was very receptive to many of Tefen’s recommendations and the companies are continuing to fine tune the agreements.

The SOWs however have a greater use for the company than just the current negotiations. Tefen wrote general and detailed documents that the company can use when it seeks to build partnerships with other logistics companies all over the world. The SOWs will serve as a platform for the company to further grow its business and meet expected lead times around the globe.

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