WHAT MAKES A GOOD 3PL COMPANY?
Finding a good 3rd Party Logistics Company can be challenging. Many companies claim to be the best so it is important to look at a number of different factors when choosing a provider for your company. Taking your time looking at these critical success factors will help ensure that you choose the best 3PL company for your business.
There must be good communication between you and the 3PL Company in order to facilitate a successful relationship. Communication process should include:
Evaluate your current and future needs regarding storage and shipping.
- Understanding of one another's needs and objectives
- Agreement on clearly defined metrics
- Consistent follow-up procedures
- Analyzation of metrics and brainstorming of solutions to new challenges
Being able to communicate clear objectives to the 3PL is important.
- Have seasonal characteristics that require flexible modifications?
- Will your inventory levels change at different times of the year?
And in return, you'll need to be sure that you choose a company that values communication, has established capabilities and processes to facilitate this type of interaction and knows what it needs from you to successfully operate.
What is the financial status of the 3PL Company? Many seemingly strong logistics companies go out of business, especially in these difficult economic times. Investigating a 3PL Company's financials is a necessary step in the selection process
- Analyze Dunn and Bradstreet reports
- Ask for relevant company financil information they are willing to share
- How long have they been in business?
- How many people do they employ?
- Have they taken on the commitment of time, money and people to successfully run their company?
Shipping is a critical part of the logistics process in terms of:
Some companies use:
- Delivering products to your customers in a timely fashion.
- Minimizing your costs
It's important to find out what services are offered and what charges would be incurred, including the rates you'd pay for shipments.
- Third party transportation services
- In-house transportation divisions
Say NO to a one-price-fits-all concept. 3PL Companies should:
Can the company you're considering handle changes?
- Understand your unique needs
- Be able to tailor a plan just for you
- Be able to change on a moment's notice
- Accomodate expansion due to a changing environment and needs
One of the most important aspects of logistics is technology. It can be used to:
When looking at 3PL options, consider:
- Automate processes
- Pick orders more efficiently and effectively
- Catch errors before they happen
- Track results through sophisticated reporting
How will this be presented to your business?
- Do they stay up to date with the latest processing, shipping, tracking tools and technology
- What systems are in place for dealing with reporting order processing, system limitations integration and inventory control
Oftentimes the difference between average 3PLs and high performing logistics companies are their people. Look for those with:
You should look for a company whose people will help you:
- A commitment to going the extra mile
- The ability to connect with customers
- An extensive knowledge of the industry, transportation and management
- Knowledge of how to negotiate cost saving
- Develop your company's objectives
- Identify new opportunities
- Stay on top of regulatory and legislature issues
- Impact your business now and in the future
- Are able to build your relationship based on trust?
There are a lot of things to consider when looking for a 3PL Company to do your storage and shipping. As you can probably see, it takes a company with a full scale offering that can function on multiple levels. There are a lot of 3PL companies that perform well in one area or a couple of areas, but partnering with a company that can offer all of the above attributes will put your company in the best possible situation.