Last week the nation’s fried chicken lovers were in up roar over the KFC chicken crisis. A logistical nightmare, turned out to be specialist vs one stop shop (OSS) catastrophe.
KFC had switched from a specialist logistics company who catered for the hospitality and restaurant sector, Bidvest, to DHL – a one size fits all logistics company. When choosing suppliers, it’s important to consider all options but particularly how it benefits your company.
So, let’s take this real-life saga and analyse how it could affect your business.
When choosing a supplier, it’s important they have experience in the industry. Although specialist experience comes with a price, remember this is a key factor in the quality of customer service. Initially, it may seem that dealing with only one company who can supply a wide range of products saves miscommunication and hassle, however this approach doesn’t necessarily pay off.
If the supplier has less experience at handling contracts like yours, it may have a knock-on effect. For example, KFC said DHL was having ‘teething problems’. The lack of experience in managing their customers specialist contract meant KFC ran out of chicken resulting in a large loss of money! Although this example seems extreme, in the transport industry, if a truck is built to a specification of what the customer needs, there is less risk of downtime.
With experience comes expertise. An OSS doesn’t necessarily have expertise in every area, as resource is split over such a wide range of products. Knowing what it takes to succeed in an industry, a specialist is more likely to offer a smaller range but take the time to manufacture a product built to your exact needs, this is stark contrast to an OSS. Specialists often collaborate with other specialists, enabling a product to be manufactured with expertise which ensures the product is delivered to the customers satisfaction. At Sterling we frequently partner with crane manufacturers and dealers, so our customers get the best truck for their fleet.
The benefit of an OSS having a chassis available in stock can improve lead times allowing you to have a new truck on your fleet faster, but often means you accept a vehicle which is not specified precisely to your specification. In the long-term, downtime may increase as a result of the truck not having the correct deck, walkway system or ramp fitted. Whilst it may have saved money and time in the short term, costs may increase down the road.
I’m not sure there is a warranty on chicken, but for some manufacturers they do not guarantee warranties on products fitted by an OSS. Some truck crane manufacturers, refuse to guarantee the warranty, unless the crane has been fitted by one of their depots and not by a non-franchised company – something every customer should consider seriously before placing an order. Avoiding unnecessary costs on new machinery is paramount for any business.
As mentioned before, an OSS has a much larger range of products to specify and supply. For example, when buying a truck, a OSS would specify the chassis, cranes and bodywork. With three areas to focus on, all of which include a staggering number of configurations, resources are not distributed evenly.
Limited resource means one area is most likely to become will become an area of expertise for the supplier at the expense of the other two. Whilst a company may focus on the crane aspect, often they cannot offer a wide range of options available on the bodywork or chassis. Therefore, you can choose exactly what you want on the crane but may have to a compromise on the bodywork or the chassis.
What’s best for you?
Analyse what matters the most to your company and determine the values you want your suppliers to meet. Without researching, a one stop shop on the surface may be the right solution for you and take the hassle out of dealing with several suppliers, but is it worth it when compromising on service and quality?