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How To Spot Supplier Risk During On-Site Evaluations

How To Spot Supplier Risk During On-Site Evaluations

CONTRIBUTION BY Ben Goldwasser – Business development professional

In our last post, we discussed how to spot risky behavior when communicating with suppliers. The second article in our series on identifying supplier risk explores what to look for during on-site evaluations. Specifically, in the transportation and logistics industry it can be very beneficial to visit your carriers in person. While on-site evaluations aren’t required, visiting your carriers can help you build better relationships and improve communication. Furthermore, visiting your carriers on-site allows you to evaluate them for risky behaviors that could potentially affect your company.

Here are some things to look for the next time you visit a carrier on-site:

Training Capabilities

When you originally vet your carriers, you make sure they are qualified to do the job at hand, right? A part of this vetting process includes ensuring your carrier’s employees are proficient. Therefore, when you arrive on-site, it is definitely important to check out your carrier’s training capabilities. Top carriers will have dedicated classroom space, a well thought-out training course, and experienced instructors. When you’re on-site, simply ask to review their training course to get an idea of how well it is preparing your carrier’s employees to work with your company. Does the training cover how to properly perform pre-trip inspections, how to properly secure cargo, or what to do in the case of emergency? According to a  2011 Commercial Vehicle Safety Alliance study, the most prominent securement violations are “failure to prevent shifting cargo, and “leaking/spilling/blowing/falling cargo.” Ensuring that drivers are properly trained to handle securement and deal with emergencies is critical to your business

If your carrier can not answer simple questions about their training program or it seems their course lacks substance, you may need to ask yourself if that carrier is the best fit for your company. Overall, your carriers represent less risk to your business the better their employees are trained.

Properly Stored & Inspected Equipment

Another crucial risk factor to look for during on-site evaluations is how your carriers store their equipment, spare parts and securement tools. The way that a carrier stores excess equipment can tell you a lot about their attention to detail and the value that they place on having their over the road equipment be in excellent condition.

While on-site, have a look at their inspection areas. Inspection areas should be well-lighted, and have spare chains and straps to replace defective securement.  It’s important that your carriers are taking all measures to minimize violations and damage during hauls.

In addition to securing cargo, also evaluate how well your carrier’s equipment is being maintained. Are tractors and trailers assessed for potential damage, parked in an organized and safe location, and repair areas kept clean? How promptly are mechanical issues taken care of? Are spare parts well organized and in safe locations for the mechanics to access them? Carriers that do not properly maintain their equipment can put your company at serious risk.

If your carrier fails to secure cargo, or neglects their fleet, their number of breakdowns and violations will soar; directly impacting your business.

Visual Inspections of Equipment

In addition to how your carrier stores their equipment, do they keep their fleet up to date and safe? When performing an on-site evaluation, take an opportunity to perform your own assessment of your carrier’s equipment for physical damage.  Identify things that could lead to supplier error, and thus, put your business at risk. Check tires for adequate tread and proper inflation. Inspect trailers for any internal or external damages. Also make sure securement equipment is functioning properly. Evaluate cabs to ensure they are safe for the driver and free of excessive distractions.

Ensuring your carrier properly maintains their fleet can help to dramatically reduce the potential for errors. Therefore, it is crucial while on-site to inspect your carrier’s equipment, and in turn, protect your business.

Proper Compliance

A final way to minimize risk when performing an on-site evaluation of your carrier is by inspecting how they handle compliance. Does your carrier maintain organized and up to date logbooks? Do they have a detailed understanding of their drivers’ hours of service, and work to avoid violations? Also, have they had any recent drug or alcohol violations? Or even worse, are there any drugs or alcohol on-site?

By evaluating your carriers for compliance issues, you are communicating your company’s values. You also can spot risky behaviors before they dramatically impact your company.

Overall, on-site evaluations allow you to get a closer look at your carriers day-to-day practices, and determine if they are the best fit for your company. If your carriers do not have an effective training program, properly store or maintain their equipment, or follow proper compliance protocol, it may be time to look elsewhere for your transportation and logistics needs.

 

Ben Goldwasser

About Ben Goldwasser

Ben is a business development professional currently working with Spendrix. He enjoys the challenge of helping a young company grow. Ben is passionate about risk analysis, business administration, and technology issues affecting the transportation and logistics industry. Prior to joining Spendrix, Ben worked in the real estate development industry. Ben is a graduate of the University of Virginia.

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