In the first three “Basics” articles we defined the major Supply Chain partners who physically move or store your freight, or facilitate its smooth movement and storage. In this fourth “Players” installment we’ll look at a few other critical service suppliers who can keep your Supply Chain flowing by either mitigating problems or avoiding them entirely. Some might surprise you.

    A SECURITY EXPERT should be part of your team if high value cargo moves through your supply chain. This expert can be either on your staff or an outside provider of ongoing security services; or could serve as an occasional, in-depth, consulting re-evaluator of your physical and IT security risks – even to the point of conducting undercover investigations when losses due to “inside jobs” (a leading cause of product loss) are suspected. Something as innocent-looking as a door left open for a convenient smoking break could be much more sinister than it appears. It is usually worth your while to occasionally engage a security expert even if you are experiencing “acceptable”, “average”, or “normal for the industry” shrinkage. This is the best way to identify the true, underlying causes of loss and hopefully make your supply chain security performance industry-leading, instead of just average.

    A CARGO RECOVERY or SALVAGE COMPANY might also be appropriate for you, depending on the nature of your product(s). This type of company can often repair, rehabilitate, or repackage damaged product, making it suitable for sale and giving you a higher recovery than salvage or sale for scrap value. This service could lower your insurance claims and perhaps your future premiums. There are also secondary marketers for many products, who could also recover more for you than scrap value. But some companies, however, have very strict standards that prohibit their damaged product from entering the domestic market (or any market at all), even though secondary channel players can eradicate any company identification. In this case, you might need a disposal company, possibly one that is licensed to properly and completely dispose of damaged product.

    A RETURNS MANAGEMENT COMPANY is part of many Supply Chains these days. They are outsources who specialize in accepting returns off site, refurbishing or repackaging as your rules permit, and selling allowable materials into secondary U.S. or overseas markets. And they can manage required disposal as well.

    DAMAGE CLAIMS EXPERTS can help you collect from your service providers for loss and/or damage to your freight while in their care. These experts might be hired at an hourly rate, or for a percentage of claim recovery, or a combination of a base fee plus recovery commission. They might only be engaged to file and pursue claims payments, or they could consult on how to lower the incidence of claims and suggest improvements in handling, packaging, storage, and shipping. 

    FREIGHT BILL PAYMENT & PRE-AUDIT COMPANIES make sure your carriers charge the correct amounts for their services before you pay the bill - and they don’t have to be limited to just freight invoices. Some can handle all logistics invoices, usually charging you just a fixed amount per invoice paid while in many cases providing better reports than your own internal systems. POST AUDIT COMPANIES perform similar services by auditing paid invoices, filing claims for overcharges, and sharing the recoveries on an agreed commission basis. Their reports can act as a check on your pre-auditor, increasing the correction of billing errors before they are paid.

    YOUR OWN COMPANY is the most important “Player” in your Supply Chain, since each one described in this series, and others unique to your needs, must all work in concert for, and be managed by, you.

    This article is part of the monthly series authored by ISM’s Logistics & Transportation Group Board Members, who are current practitioners, consultants, trainers, and educators. In future columns, they will continue sharing their views on a number of Supply Chain topics.

    George Yarusavage, CTL, C.P.M., CICSM, is a principal in Fortress Consulting, LLC, specializing in Transportation, Logistics, and Sourcing issues. He is also the Treasurer of ISM’s Logistics & Transportation Group and can be reached at gyarusavage@yahoo.com, or (203) 984-4957. Membership in the L&T Group is open to all ISM members who are responsible for or have an interest in Logistics & Transportation.
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