Tuesday 11th Dec 2018 - Logistics & Supply Chain

Chip and win

Retailers, rather like the consumers that they service, drive the hardest bargain. They want service providers to deliver high value solutions at low cost rates. Chip and pin is a classic example. When the terminals that take hourly pounding from card-holding consumers break down, so does the EPOS system and costly queues form.

It is crucial that repairs are conducted swiftly, efficiently and with minimum downtime. Many IT partners have now revised the logistics model to deliver better value to their retail customers. Gone, are the central distribution centres, replaced by strategic hubs in key conurbations from where parts can be shipped directly to more flexible field-working engineers. Now courier drivers not only deliver vital components to the stores, but have been trained to undertake low level repairs on chip and pin terminals.

These new driver/engineers pose no threat to the IT company’s highly trained and salaried engineers. Indeed, these new services complement their offering. They are now able to plan their time more efficiently by concentrating on the high-end, more technical repairs that warrant their superior skill and attention.

On top of the strategic hub the entrepreneurial and intelligent outsourcers have also invested in hundreds of Pick Up and Drop Off (PUDO) centres around the country – all en route to the next job. These are counter collect companies offering other merchant services but partner up with ‘outsmart’ companies to use their quiet times which conversely are the courier’s busy times. This collaboration includes other strategic PUDOs – the drop ‘box’ services that engineers can collect from or drop off at en route.

All this works as a fixed payment, ‘off-book’ investment rather than a cost to the business. This streamlined offering is overlaid with a strategic IT interface that keeps all stakeholders involved and informed at every level. The engineers each have a hand-held XDA that scans in the new parts to be fitted and the old part to be repaired so the work is traceable, as is the vehicle through GSM tracking ensuring that no unnecessary miles are driven.

Outsmarting is replacing PAYE with POFC – pay one fixed cost, so that chip and pin becomes chip and win for everyone. This also shifts risk to the supplier and removes a costly overhead for low-end plug and pay repair work. Finally, it aligns with the dictionary definition of outsourcing by allowing the IT companies and the retailers to focus upon their core skills of high-end, high value customer relationship building.

Sam Sharma is CEO of Rico Logistics.

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