Dos and don’ts when choosing a 3PL partner
Choosing a 3PL company can help you save time and manage your operations as you focus on growing other sectors of your business. Warehousing processes such as managing inventory, shipping, packing receiving, and picking can be stressful and time-consuming for small businesses. Brands enjoy many benefits when outsourcing these processes, but several things should be considered when choosing a 3PL partner for e-commerce.
Dos
1. Check the location
The location should be near your high-consumption region. The closer you are to these areas, the easier it is to reach and create value for your customers. It also reduces the time spent to ship products to your customers during last-mile operations.
2. Check the 3PL’s financial ability
Your warehouse partner should be able to support your business. Financial stability is prime when selecting a 3PL partner. Confirm this by checking their track record with other customers.
3. Consider the 3Pl’s scaling ability
Choose a team that will help your business grow. If there is a massive order increase, your 3PL partner should be able to handle it. Do they have enough warehouse space and manpower? Do they have an online system to organize orders and make supplies effectively?
4. Check the timestamps or logs
Ask your potential 3PL partner if they keep a log of when trailers arrive at and leave their warehouse or if they use timestamps to achieve the same to make excellent measurement potential. It might help you monitor performance issues that might be causing excessive detention claims.
5. Check the IT capabilities of the 3PL
Check whether your 3PL partner has a good logistics technology. Have they automated their logistics processes? Do they give you visibility dashboards and order tracking capabilities? Can you integrate your order management solution with their delivery system? How accurate are their tracking capabilities? Do they provide you with reports, statistics, KPIs and insights into the delivery progress? Are they informing your customers in a reliable way with their expected delivery times? Are they able to reach customer locations accurately? Is their tech enabling them to increase the first attempt success rates? Choose a 3PL partner that uses the latest technology in their logistics processes such as route planning software. This will be beneficial to you as a business partner.
6. Look at the 3PL’s policies
Check the training and hiring policies of your 3PL partner as well as their procedures and safety policies. This will give you the knowledge of how your goods will be handled. The safety policies should be applied to managers, consignments, employees, and warehouse staff.
7. Capitalize on the visibility systems
Ensure that your 3PL partner has set up visibility tools to notify your company in instances there is an exemption to a fulfilment rate, inventory level, or delivery schedule. This will help you notice performance glitches before they disrupt the supply chain.
Don’ts
1. Don’t over-analyse
Limit your options to a few 3PL partners when searching. Searching for many 3PL partners may make you miss the little important entails that will help you make a final decision. A shorter list will help you keenly evaluate each partner.
2. Don’t fail to consider the price
Do not choose a 3PL partner due to their competitive prices. Despite this being a major factor to consider, do not compromise quantity over quality. If the 3PL partner does not have successful and quality processes, your business is likely to suffer.
3. Don’t ignore the power of positive reinforcement
Most countries use the measurement data from their 3PL partners to decide annual award winners. The 3PL providers that win the awards are motivated and inspired. So, have a look at providers who have won an award before.
4. Don’t fail to make comparisons
Complete a set of performance reports that compare all your 3PLs based on the same quota, and then offer them the reports. Knowing how they compete against each other can help 3PLs know how they are faring and improve or maintain good performance.
5. Don’t make a long-term contract
If your 3PL partner cannot accommodate your growth, it will set you back. Therefore, you should be able to leave. Most e-commerce companies are moving into monthly-to-monthly contracts which work much better.
6. Don’t rush into a partnership
Check the training and hiring policies of your 3PL partner as well as their procedures and safety policies. This will give you the knowledge of how your goods will be handled. The safety policies should be applied to managers, consignments, employees, and warehouse staff.
Conclusion
With the proper transportation, solutions, dedicated enterprise, and infrastructure, 3PLs can be beneficial to your company. No matter the location, size, or industry of your business. The major question, however, is whether it makes sense to look for a 3PL partner. Some companies may have internal expertise and resources and might never need 3PLs. Others might find that 3PLs might greatly ease their fulfilment and logistics worries and hire one for improving their brand in the offing.