5 Practical Tips to Make the Most of Your 3PL Logistics Provider
There is a growing need for businesses of 3rd party logistics providers to manage their logistics, transit and supply chain functions. Therefore it’s essential to take care of every single aspect of the contract terms before starting business with the provider. Here are various points to consider before making a contract with a 3PL company.
1. Ask Better RFP (Request for Proposal) Questions
You may have the old RFP questions on mind, but avoid asking them. Eliminate weak ones, revise old ones and add new ones to start insightful replies. Some examples are:
- Can I see process map of how you would meet a typical order for any of your existing clients?
- Can you share a scenario with a client that didn’t occur as good as you’d expected and can you explain how you overcame that situation?
2. Ask What They Do the Best
Like most other organizations, majority of 3PL logistics providers excel in some or the other niches, like transportation, global logistics, warehousing etc. Most of these providers start off with a focus on only one niche and later add others. Ask your 3PLS about their strengths. Based on the locations of office and yard, a 3PL may possible promise of capacity in some areas of the country, while giving considerably lower prices. This information will help you match your needs better to the right 3PL.
3. Add Your Performance Goals in the RFP
Implore input from all the important players in your supply chain about pricing, performance and productivity levels they expect to achieve through outsourcing.
4. Pay More Attention to Operational Excellence than Procurement Process
When companies put 3PL bids, they usually focus their time and attention on bids themselves, rather than evaluating whether a new service provider can show the level of excellence they expect. Shippers must consider what optimal situation looks like once the execution is complete and how they can go with their 3PL partner to enhance it.
5. Identify What’s In and Out of Scope
Most procurement-drive organizations will push for more from their providers. The risk of scope creep is that it can erode the relationship over time. 3PLs may build walls and become less happy to give more when customers try to take rather than asking. On the other hand,, shippers that identify when they ask for out-of-scope solutions and appreciate it in advance have higher chances to find 3PLs more willing to help out and invest in relationship.
Remember these points to make the most of your logistics partner so that you and they can thrive in business.