Consolidation network options - a checklist of things to consider.

Once you have started a dialogue with a consolidation provider, there are a number of elements that you should consider including in any service agreement, though not an exhaustive list, examples would include:
 

Legal, Health & Safety Requirements

    Risk assessments
    Site health & safety rules
    Warehouse and vehicle cleanliness & condition
    Product characteristics (i.e. aerosols)
    All legislative compliance
    Security and fire precautions
 

Service Criteria

    Lead-times
    Collection timeliness targets
    Delivery timeliness targets
    Turnaround times targets
    Delivery confirmation criteria
    Equipment handling
    Stock management
    Pick accuracy / error rate
    Productivity rates
    Alignment of customer delivery windows
 

Warehouse Specification

    Space allocation
    Throughput capacity
    Temperature regime
    Storage/racking type and height
    Opening times
    Load and unload methodology (side or rear)
    Automation
    Pallet height and weight capability
    Product segregation capabilities
    Pest control
    Housekeeping standards
    Site security and access
    Site restrictions (i.e. curfews)
 

Vehicle Specification

    Dimensions, size & weight
    Side or rear loading
    Temperature regime
    Vehicle type
    Floor strength
    Other equipment requirements e.g. tail-lifts
    Load restraint
    Product compatibility
    Load security
 

Systems and Processes

    Warehouse management system specification
    EDI (Electronic Data Interchange)
    Confidentiality
    IT support capability and contingency
    Reporting and communication
    Network security
    Load planning and building
    Reusable equipment control (e.g. pallets)
 

Insurance

    Level of insurance
    Accountabilities
    Claims procedure
    Limits of liabilities
 

Returns, refusals and damages

    Mechanism for dealing with returns, refusals and damages
    Payment process
    Accountabilities
 

Commercial Arrangements

    Invoice process
    Purchase order numbers
    Load reference numbers
    Self bill vs invoice vs deductions
    Fuel surcharge
    Addresses and contacts
    Payment terms
    Commercial terms (open/closed book)
    Performance incentives
    Review period & measurement
    Agreement exit notice period
 

Contacts and Escalation

    Key Contacts
            Operational
            Financial (e.g. accounts department)
    Process for dealing with out of hours issues
    Dispute resolution