I’ve often heard that a Procurement or Logistics Director’s least favorite part of his or her job is 3PL selection. Why?
It’s simple; selecting the wrong 3PL can cause repercussions throughout the supply chain, ultimately leading to delays or outright failures in getting product into the hands of consumers, impacting sales and profits. It is your life line and one that many people depend on; stockholders, employees, their families, your customers, and their families. A broken link in your supply chain could cause loss of sales due to lack of trust and downtime, not to mention the effect it can have on your business’ cash flow.
This possibility of failure makes 3PL selection one of the most strategic (and scrutinized) decisions that these managers will ever have to make. Here are 6 C’s that can make the difference between a successful 3PL partnership and a need to go back to the drawing board.
A lot goes into 3PL selection and it’s easy to get caught up in the price for the service, but this is not where you want to focus all of your attention. If the provider does not have a successful track record as a 3PL partner, but they have the best price, your business will suffer in the end and you could end up paying more in the long run. When reviewing your options, instead of focusing solely on cost, pay attention to:
3PL providers have the space, technology, transportation, and staff in place which ultimately lowers your overhead costs; but is their current capacity enough? Adequate technical capacity is paramount in this day, it’s important that the 3PL provider will be able to meet any growing demands.
Everyone loves doing business with companies that are convenient to work with. Take Amazon, from my phone I can order the simplest of items and have it delivered to my house in 2 days. I’m not sure how they can make it easier than that!
Same thing goes with finding a 3PL partner, communicating with them needs to be convenient. After all, they are a partner in your supply chain and should be viewed as a member of the management team as they play a part in achieving company and departmental goals.
It’s important to clearly communicate with potential 3PLs the capabilities that are required to adhere to your processes. Be upfront about what it is that they need to accomplish for you and document KPIs. The 3PL provider needs to fit your needs and have the ability to help you reach your goals. Consider the following when selecting a 3PL partner:
The 3PL you choose should view your relationship as a partnership. Share your goals with them and find out how they plan to work with you to become more efficient operationally. Logistics is a service oriented business so check references and look for evidence of efficiency and reliability with past and current customers.
Your 3PL operations must run as efficiently as possible and it’s an ongoing process to document, test, and implement improvement. With a Continuous Improvement program in place, a 3PL is always looking for ways to reduce waste and operate more proficiently, which can have an impact on your bottom line.
It’s no wonder that 3PL selection can be a very stressful selection and integration process for the Procurement or Logistics decision maker.
Keller Logistics Group is a small company with big company capabilities; whether your need is for transportation, warehousing, fulfillment, or packaging services, we’ve got you covered.
Learn more about what makes Keller Logistics Group and its affiliates the best choice for your company’s 3PL logistics needs. Contact us to learn more about our services and request a no-obligation quote. Call 419-780-3767 or return our online contact form today.