How to Choose a 3PL That Will Meet Your Company’s Needs
As supply chain and logistics management have become more complex, large and small corporations turn to specialized 3PLs to help bridge these widening complexity gaps. Research from the past few years has revealed that up to 90 percent of companies find value in 3PLs for their access to capacity, technology and innovative ways to improve logistics effectiveness and drive customer service levels.
Additionally, says GlobalTranz’s Ross Spanier, C-level leaders looking to save on logistics and supply chain operations are realizing it’s more profitable for them to focus on improving their company’s competencies and outsource day-to-day logistics and transportation needs. But how do you find the right 3PL that meets your needs and what should you look for? Prior to your 3PL research, know exactly what you want with a logistics partner. Prioritize your essential needs before you go “shopping.” To get started, here are five factors to help you choose the right 3PL.
5 Factors to Consider When Choosing a 3PL
- A Strong Goal Orientation: Choose a 3PL that is good at establishing key performance indicators (KPIs) for your logistics operations and tracks them obsessively. Essential KPIs include on-time pickup, on-time delivery, tender acceptance or rejection percentages.
- Broad Capabilities: It’s natural that larger 3PLs offer you a broader range of capabilities along with “deeper pockets” for investing in future technology advances. Inventory the capabilities of each 3PL you consider to make sure they offer the modes, carrier network and TMS technology you need. Also, does the company have a great support team that you’ll interact with daily? Can you reach them at all hours of the day? Is customer service considered an important corporate value?
- Performance History: Study the company’s history of on-time pickups, on-time deliveries, tender acceptances or rejection percentages. What they’ve done for other companies is a window into how they’ll perform for you. Ask for customer references and testimonials.
- Reliable, Advanced Technology: Technology is the ultimate competitive differentiator. The best 3PLs leverage cutting-edge technology such as artificial intelligence and predictive analytics that are integral to the 3PL’s TMS. As the linchpin of your logistics operations, make sure the 3PL you consider offers a world-class TMS. Any TMS you choose should mix well with your existing ERP, WMS (warehouse management system) and other business systems. always Request a demo of the 3PL’s TMS capabilities.
- Financial History: Look closely at the company’s financials. Does the company demonstrate a strong growth history? Will they be around five years from now? How much money do they invest in technology and acquisitions? Can they grow as you grow?
Connect with an expert to see how GlobalTranz fares against your 3PL checklist.