Follow These Contractor Management Tips

The name of the game in today’s business world is outsourcing.

Companies across the globe benefit from the use of contractors. Sometimes, it is best to outsource more specialized tasks to individuals or businesses. Not only does this help them save money on wasted payroll, but in most cases, it permits them to bring in a proven expert that produces results.

Results that can be measured. 

But how do logistics companies review the performance of contractors working within their supply chain operations? How can a supply chain business verify that each contracting agent is qualified, certified, or operating with ethical integrity? What tools are available to logistics companies to audit their performance, and most importantly, verify they are receiving value?

In this article, we’ll discuss the keys to a strong contractor management program. We’ll explain why it’s so important to have a system of checks and balances with your contractors and vendors.

Are you ready?

Good, because it is actually really simple!

The Keys to Completing a Contractor Management Program

Many businesses opt to hire contractors for a wide variety of reasons. It could be due to not having to pay them benefits, deal with HR issues, or keep them on payroll during slow periods.

Contractors provide supply chain businesses with multiple benefits with regard to scalability. They can work, be let go and retained again as business volume dictates. 

However, measuring the performance and standards of contractors can be a challenging process for some logistics companies. This is especially true if they don’t know what to be on the lookout for.

While specifics are unique for each business type, the contractor in question, and the location of the logistics business, there are a few important things that most supply chain businesses should include in their contractor management program...

Licenses & Certifications

Proper licenses and certifications are a common issue in the transportation industry.

Many companies actively hire contractors to produce or deliver products under their umbrella. However, in order to do so, many of them must be DOT certified. For others, all they need is to obtain a CDL. 

Insurance coverage

Before a contractor puts their hands or tools on anything, ensure they have insurance.

A reputable contractor should have no problem providing this information upfront or when asked. Also, depending on what goods you are trusting them with, make sure they have enough coverage to account for those things should anything happen.

These requirements are not industry standards, but they are a good practice.

Qualification

A contractor is typically hired to complete a task because they are a specialist in their industry. But this doesn't mean that they are necessarily qualified for the work.

All supply chains need a procedure in place that allows the verification of contractor qualifications.

Final Thoughts

Logistics businesses spend thousands of dollars each year on software solutions to improve the optimization of their supply chain. But they also spend a lot of time and effort reviewing the various performance levels. Working with a proven 3PL to help you customize a program that is robust, effective, and scalable. 

Ready to get up and running with a proper contractor management platform?

If so, reach out to the team of supply chain management experts at Redwood Logistics today!