01 Apr Right Size vs. Right Shape
No matter where you operate or what your relocation volume is, one thing holds true: your moving network is only as strong as your supply chain. We’ve seen how technology can enable clients to better manage their mobility supply chain and achieve organizational goals – whether increased quality, least risk, competitive cost, different moving types, sizes, or location capabilities. The question is, what factors need to be considered to build a supply chain that works for you?
An effective supplier network is elastic and responsive to fluctuations in demand while maintaining service levels. It requires having the right function in the right place at the right time. By contrast, moving and mobility service providers – driven by hypercompetitive RFPs – are typically rewarded based on lowest cost.
Household goods moving is complex, and the lowest-cost model typically can’t deliver on quality, timeliness, and provide solutions to the myriad of variables involved in almost every move. Clients are in a far better position when they invest the time and effort into building an effective moving network – a well-managed supply chain – where business is fairly awarded to partners who are able to prove their worth.
Size vs. shape
– Hosea Bottley, Aaversal Global Relocation
Let’s walk through an example and say you have 200 moves per year. You’re in the continental EU, which means you’re almost completely dependent on road suppliers. You know peak season results in a capacity crunch every year, so you sign contracts with 20+ different vendors to make sure you’re covered. As a result, some of these suppliers only receive a handful of moves from you. So, when you need to service a last-minute special request, you’re under pressure to find someone who can. Good luck with that in peak season.
A better way to approach your moving network would be to closely understand your most common origin and destination locations, average timing of your relocations, and your overall organizational priorities. This will enable you to build your supply chain with intent and select only those movers who are strongest in your shipping lanes, can accommodate shorter lead times, offer high-touch service, and support whatever special circumstances that are unique to your account.
Unfortunately, the typical corporate RFP process tends to overvalue pricing and undervalue (if not ignore altogether) other factors such as supplemental pricing, capacity, and transparency. This is backwards to the way it should be, because how a supply chain has been built directly determines the client’s ability to get fair pricing and excellent customer service.
If you are a major corporate account, it can be difficult to balance the volume discount game. You could sign on with a limited number of suppliers that offer the best pricing and hope they can deliver. Or you might engage more suppliers than you need for fear of missing out on best price or service coverage. But there comes a point where companies can begin to erode their own position. A high-volume account might warrant a discount, but spreading your business too thin can also diminish movers’ abilities to leverage their network and service your account.
Such is the price to pay when your supply chain is built on price alone. Information and transparency are in high demand, yet are also in perpetual short supply. The more information you’re able to provide your suppliers, and the more transparency you require in return, the better everyone along the supply chain will perform. We’ve seen movers be highly competitive by strategically playing off their strengths to best support the unique needs of each client. This is the Holy Grail, the elusive win-win… and achieving this may require a complete overhaul of how you communicate, manage, and distribute moves to your moving network.
What’s your system’s “Why”
When technology first entered the moving services space, the new platforms and bid boards made a bee-line for the bottom, creating an online marketplace that was hypercompetitive and detached from reality.
Remember that technology will do whatever you design it to do. What does your system incentivize?
PricePoint was designed to create an environment that rewarded movers based on quality, performance, and competitive, transparent pricing. If movers are strong in a certain area, we can prove it, and if they’re not, we can help find alternatives – creating true partnerships that bring together right size and right shape. Quality movers are rewarded with more business, and customers are rewarded with better service and fair pricing.
Want great moving network and get better service at fair costs? Let’s connect.