The world of contract warehousing…

31 May 2010

The world of contract warehousing can be one of confusion, hollow promises and disappointment.....and ultimately, poor decisions of supplier can be costly to your business in more ways than one.

“In the ideal world, it would be nice to think that old fashion values still existed in business and that someone’s word is......well....their word. It appears that progressively and regretfully, the values of trust, honesty and integrity are being replaced by scepticism, distrust and an overall feeling of uncertainty when it comes to sourcing suppliers. I would even go so far as to ask the question whether in fact many suppliers can be relied upon to be “fair and reasonable” in the absence of a formal legally binding service agreement”.

“For many, the days of genuine business relationships seem to be a distant memory. In a world of diluting values and increasing litigation, I can appreciate why many businesses feel resigned to the fact that the basis of any business relationship is now a convoluted and lengthy legal document rather than a mutual understanding, respect and acceptance of what is deemed to be fair and reasonable for each other’s business”.

“Yes, I could be labelled as naive, ignorant or both but I guess the point I am making is that on a fundamental level, many businesses, particularly the SME’s of this world, would prefer to do business where core values and mutual respect underpin the relationship with their suppliers and or their business partners”.

“ACR Supply Partners is a business that is determined to restore core values, confidence and trust in an industry that historically has been their own worst enemy. ACR provides a real and genuine alternative to customers who are quite simply fed up with the current crop of Contract Warehouse providers. Working with our partners, ACR offers a complete spectrum of essential services and capabilities as a single supply chain management partner. I make no apologies for the fact that we have strategically selected business partners who compliment our business in non-core areas. ACR’s core business is Contract Warehousing and this is very much our primary focus, particularly during the initial growth phase”.

“In my opinion, the Contract Warehousing landscape has evolved quite distinctly over recent years. Increasingly, the size and capability of genuine Contract Warehousing providers seems to be heading in opposing directions rather than merging together... if I can use that term. What I mean by that is that in my opinion, there are two distinct supplier groups at opposite ends of the market”.

“At the lower end of the market we have the “smaller” and often established “logistics” providers who have typically evolved from a transport or freight forwarding heritage. In these instances, it could be argued that Contract Warehousing is not their core business and as such, their primary focus in terms of investment and core service capability is lacking. The end result is a service provider who is not committed nor aligned to the short and long term strategy of its client and equally as important, a service provider who is ill prepared to adapt to the market conditions in terms of meeting technological requirements and increasing service expectations. Additionally, with the recent economic belt tightening by most of the major financial lenders, getting access to additional working capital has been difficult at best even for those businesses wanting to make the necessary investments. The end result is a client whose business is potentially exposed and at risk by way of using a supplier who may not be meeting existing supplier requirements or future supplier requirements within its respective market place. The fundamental day to day relationship between the client and supplier may be reasonably sound on a personal level but outside of that, there are significant areas of weakness within the supplier’s core service capability that more than likely will impact the client’s business at some point in time. From the client’s perspective, this is not an ideal position to be in”.

“At the upper end of market, we have the larger established logistics providers who undoubtedly have solid infrastructure, national or international presence, the latest technology and in many cases, strong financial backing. Most of these providers are household names or in the least, very well known to anyone who has had any exposure to the local logistics market for any length of time. Typically, these providers focus on the “big end of town” in terms of the size and nature of the clients that they both service and target. For many SME businesses looking for a Contract Warehousing provider, suppliers of this nature and those servicing the upper end of the market are simply a poor fit in my opinion. Yes, they have great infrastructure and the latest technology but as an SME, you will more than likely suffer from the small fish in a big pond mentality. In other words, if you want to feel loved and important, you might just be disappointed. Their definition of service seems at odds with yours!

What does all this mean and where does ACR Supply Partners fit into the equation?

In my opinion, there is a genuine opportunity in the market to fill the gap between the two ends of the supplier spectrum detailed above. ACR Supply Partners offers a Contract Warehousing provider who:

  • Is committed to caring for your business in the same way that we do for ours.
  • Is independently owned.
  • Is committed to setting new benchmarks in terms of service, flexibility and cost outcomes.
  • Is committed to understanding your business, its requirements and expectations.
  • Is committed to ensuring that your business has a competitive advantage.
  • Is committed to ensuring that your reputation in the market place is never compromised.
  • Is committed to continued investment in technology, people and best practice.
  • Is committed to building strategic relationships underpinned by integrity, honesty, professionalism and transparency.

“ACR was conceived and built on the basis of establishing a new level of integrity, professionalism and leading service level delivery.  We take an uncompromising approach to everything that they’s that simple. We are looking to establish long term relationships with businesses who share common values, are culturally aligned, and ultimately, those businesses who want a supplier they can trust”.

“In my experience, at the end of the day, clients fundamentally want a supplier who has strong and robust disciplines throughout their business that equates to providing a consistent, reliable and flexible service. Too often, clients get side tracked and influenced by all the potential “bells and whistles” but this means little if the core service delivery is lacking”.

“To many, suppliers spend too much time talking about themselves.....boasting about their levels of expertise and all the wonderful services they can provide. It’s almost like they are trying to convince themselves more so than the client! They should spend more time listening to their clients and focusing on what their client’s wants and needs are or by providing a good fundamental level of service.”

“I have seen it time and time again where all the promises under the sun are made to lure the client but when the formalities are over and done with, complacency sets in and yet again, another client has gone through the often costly and disruptive exercise of changing suppliers only to find that their service and cost objectives have not been met. It’s no surprise that businesses are a tad cynical and hesitant when it comes to making decisions on this kind of thing”.

“I have spent many years working hard to establish my reputation and integrity in an industry that unfortunately, like most, has its share of questionable operators. Like with all things that I do on both a personal and business level, I have huge expectations and strive for perfection wherever possible. It doesn’t matter that the product that ACR manages as a business is not ours....I treat every transaction and every outcome as if it were my business and my product. It’s all about the mindset of the business. I don’t believe in settling for second best if there is a better outcome that we can achieve. My team is no different...I trust them unconditionally to uphold ACR’s commitment to our clients. Business is not always about taking accolades for all the good things that we do.....there are some extremely tough and challenging times but I am a firm believer that these things are meant to test a business, we welcome challenges and we always find a way to make it happen”.

“In the same way that I place huge expectations on my team, I also place the same expectations on my business partners and suppliers...they need to be the right fit in every sense of the word. I have sourced what I believe to be the most appropriate tools to perform the required tasks. That includes both people and technology”.

“Critical to the success and competitiveness of ACR is the technology that underpins the business. I have implemented the Paperless Warehousing Warehouse Management System and have teamed this with a Real Time Logistics solution from Dematic. Both systems provide industry leading levels of technology and provide the levels of functionality, flexibility and scalability that I need with a growing and dynamic business”.

ACR welcomes the opportunity to understand more about your business and how we can help you with your Warehousing and Logistics requirements. We look forward to hearing from you.

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