Q1: what are the key points that retailers should consider before commencing the procurement process for their logistics platform/components?

• Scope of tender – The retailer should clearly set out their business requirements prior to the procurement process. This will allow the service provider understand the retailers needs and tailor their responses accordingly. To often retailers recognise they need help but are often not clear with what they wish to achieve
• Relevant sector experience – Does the service provider have relevant experience within the retailers sector and is the business of a suitable size to ensure a good fit. Undertake some basic research on the service provider. For example, a retailer should not talk to a service provider that specialises in handling frozen and chilled foods when they are wanting to distribute fine jewellery. Similarly a smaller retailer should not necessarily approach a globally dominating service provider if they are wanting a partnership approach. Neither should a multi national retailer approach a small service provider if they are seeking a wide range of service functions
• How the project is to be funded – Understand from the outset how you see the project being funded. Will the funding come from a one off capital injection? Are the funds to be released slowly over a given period? Is the retailer cash rich and are the funds to be provided internally or external?. Is the retailer looking to lease wherever possible?

Q2: what are the key questions that retailers should ask of all shortlisted options?

• Customer intimacy – Ask the service provider to demonstrate how they would develop a deep understanding of the retailers business and challenges. Do they just want to provide a service or do they want to really get involved within the retailers business. Will they actively look for ways to support the retailers business going forward and develop the relationship too.
• Solution flexibility – Can the service provider demonstrate options around solution flexibility and minimising up front capital. Is the service provider looking to sell as much as they can or are they looking at a long term relationship building on the retailers needs and available funds. Will the service provider explain the pros and cons of different solutions such has high capital cost of automated against low set up cost of  manual solutions with higher ongoing costs.
• Funding options flexibility – Can the service provider offer flexible funding options, are you able to share resource with other retailers to reduce costs and maintain resource continuity? Will the service provider financially invest in the success of the partnership and to what level? To what level of risk will the service provider take within the partnership or is the provider completely risk adverse

Q3: what are the key points you should consider for your first year service review with your service/platform provider?

• Performance – How did the solution perform against the original brief and is the original brief still relevant. How has the retailer performed against the original brief and is the reality different. Has the business changed? Have some of the assumptions been realised? Identify any gaps, realign both partners expectations and set a defined date to review.
• Costs – Are the costs in line with original expectations. Have any overspends or underspends and the reasons for these been identified. Similar to performance has the profile of the business needs changed against the original assumptions. Review all changes to cost and set a realistic budget for the following year. Review and realign the assumptions too
• Continuous improvement – Has the service provider begun to identify continuous improvement initiatives over and above the original project scope. Does the service provider have your business needs at the forefront of their mind and are they demonstrating intimate knowledge of you challenges and potential.