SCA Hygiene Products has its tender offers formulated by alphalogs

SCA Hygiene Products is Europe’s tissue market leader, producing paper towels at its Mainz facility. It also supplies European markets and overseas countries through the adjacent International Distribution Centre (IDC).

alphalogs developed the strategy, including all necessary tendering documents, to switch/outsource transport services.

The SCA project revolved around the general principle that outsourcing storage services (contract logistics) different significantly from awarding contracts for transport services in terms of the complexity of the change process. The party providing the assets (premises, equipment, IT) must be negotiated. The most critical factor when it comes to outsourcing is whether there is an exit strategy, and whether the contract can be terminated without any major disadvantages. Only then can a company maintain its purchasing power and privileges.

Analysis

The alphalogs analysis assessed the cost structure of the forwarding partners and shipment in order to position services at a more reasonable price level.

The alphalogs analysis team devised a strategy for a possible switch, and compiled the necessary tender documents for transport and delivery services. In doing so, alphalogs’ logistics advisors particularly took into account the size, competence and reasonable number of shipping partners, the distribution of relations and delivery areas, processing through direct or transhipment traffic, partnership exclusivity, exceptions for special cargo, and the extent of additional services, such as materials planning, returns or empty pallets.

Planning

alphalogs planned the possible outsourcing partner switch for both warehouse services and transport services. Using simulation models, the available offers were quickly and precisely compared, and alternative combinations developed. The tendering process, comprising the following stages, was illustrated simply and efficiently with appropriate software tools: Preparation of delivery structures, establishment of future shipment structure, definition of transport and condition structures.

Implementation

alphalogs compiled the qualified tender documents for both the transport and warehouse services. The long-term partnership, based on which the service provider had erected a new logistics centre, had to be adapted to the market conditions. The strategy recommended by alphalogs, entailing qualified tendering with a last call for the existing partner, was enacted and openly communicated.

SCA Hygiene Products received comparable offers to outsource its warehouse and transport services within just three months. It also became much more familiar with its warehouse and transport structures, enabling it to take targeted measures to reduce costs.
The approach was also of huge benefit to service providers, for whom the tenders provided greater security and reliability in terms of their offers, and enabled risks to be rectified. The last call gave the existing partner the opportunity to retain its business deal.

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