10: Operationalize contract

1. Develop implementation plan

Once the contract is signed, the first step is to jointly create a comprehensive implementation plan with the LSP. The plan should cover all critical elements required for a successful transition and launch of logistics services:

• Transition strategy: Determine whether the transition will be handled in phases or as a "big bang" changeover. A phased approach might reduce disruption, while a big bang ensures all new processes are in place at once. Consider the organization's capacity to handle either approach, along with the potential impacts on service delivery

• Detailed timeline: Create a timeline that outlines all necessary steps, including workstreams, milestones, and key decision points to ensure readiness for operational go live. Build in buffer periods for unexpected delays

• Realistic timelines: It is essential to develop a timeline that is not only ambitious but also realistic. Rushing the transition can lead to missed milestones, operational issues, and strained relationships. Ensure that both your organization and the LSP are aligned on the time needed for key activities, such as system integration, staff training, and inventory handovers. Account for potential challenges or delays and include contingency plans to adjust the timeline if necessary

• Equipment & technology: Specify any new equipment, technologies, or systems (e.g., Warehouse Management Systems, Transportation Management Systems) required by either party. Ensure that any required systems integrations, such as linking your IT systems with those of the LSP, are planned and tested. Ensure that the plan includes training for staff on new systems and processes to avoid operational bottlenecks

• Standard Operating Procedures (SOPs): Jointly develop SOPs or validate existing ones to ensure that everyone understands their roles and the procedures for day-to-day operations. SOPs should cover key areas such as inventory management, transportation, and quality control

• Compliance & risk management: Ensure that all compliance issues are addressed, including health and safety standards, regulatory approvals, and risk mitigation measures (e.g., insurance coverage, risk assessment)

• Communication plan: Set up a clear communication plan, both internally and with the LSP, outlining how updates, issues, and changes will be communicated during the transition period

2. Establish management structure

Before operations begin, a management structure must be put in place to oversee the relationship with the LSP and ensure that the contract terms are followed. This should include:

• Regular meetings: Establish a schedule for regular meetings, both at an operational level (e.g., weekly or monthly reviews) and at a strategic level (e.g., quarterly business reviews) to address higher-level concerns

• Joint continuous improvement process: Plan for a continuous improvement framework where both the organization and the LSP work together to identify and implement improvements over time

• Performance management: Set up the performance management system as outlined in the contract, ensuring that all KPIs and metrics are measured, reported, and reviewed regularly

• Decision-making & issue escalation: Clearly define the decision-making process, as well as how issues should be escalated to ensure quick and effective resolution of any problems that arise

3. Transition from previous operations

If logistics services were previously managed in-house or by another LSP, carefully manage the transition:

• Handover plan: Ensure that there is a structured handover from the outgoing team or LSP. This may include data transfer, physical transfer of inventory, and transition of responsibilities

• Minimizing service disruption: Use a phased implementation approach if necessary to ensure that there is no disruption to critical services, such as health product deliveries or cold chain management

• Staff training & support: Train your staff on the new procedures and tools being implemented with the LSP. This may include everything from IT systems to daily operational procedures

4. Execute ‘go live’

The go live phase is when the LSP takes full control of the contracted logistics services. This is a critical moment where close monitoring is required:

• Monitoring systems: Ensure that the systems and processes set up to monitor KPIs, SLAs, and performance metrics are live from day one

• Immediate troubleshooting: Be prepared to respond quickly to any issues that arise during go-live. Develop a troubleshooting protocol with the LSP for addressing and resolving any operational issues that may emerge in real-time

• Stakeholder communication: Maintain transparent communication with internal and external stakeholders during the go-live phase. Keep them informed of progress, any challenges, and resolutions

5. Monitor performance & troubleshoot

After go-live, it’s essential to carefully monitor performance and troubleshoot any emerging issues. This includes:

• Real-time monitoring: Use real-time data to track the LSP’s performance against the agreed-upon KPIs and metrics

• Problem resolution: Ensure there is a clear protocol for addressing any problems that arise, such as missed deliveries or quality control issues

• Continuous support: Provide ongoing support to both your internal teams and the LSP to ensure that the implementation remains smooth