Every year that goes by more & more third party logistics providers begin to upgrade their inventory management/logistics software packages which if implemented properly will be nothing but a positive thing for the industry.

Because of the dot com crash of the 2000’s and the general conservative nature of the 3PL industry a lot of providers have been very skeptical of new technologies, and while they have acknowledged their existence and took note, few providers actually upgraded their existing offerings and took the plunge with the multi-million dollar expenditures required.

Enter SaaS (software as a service). By leveraging web based software, 3PLs are finally able implement scalable solutions that fit within their business models, rather than the sometimes cost prohibitive software solutions of the past. Better yet, it has never been easier to test out and experiment with different software solutions before getting fully immersed with a particular provider.

Logistics Software solutions have never been more flexible to the needs of supply chains, and 3PLs in the mid-market are in a position to leverage these technologies for the benefit of their clients.

Now the next question is will RFID ever take off as it has been proposed.

For every successful logistics partnership, there are the outsourced relationships that for many reasons just don’t work out. Maybe the logistics provider didn’t plan properly to take on a client’s business, maybe the company had unrealistic expectations. Either way here are some of the problems that can doom some 3PL Provider relationships to fail.

• Lack of Standard Operating Procedures
• Poor Communication during Client Implementation
• High 3PL personnel turnover
• Service Level Commitments Consistently Not Met
• Poor IT Capabilities
• Over Reliance on Technology
• Unpredictable inventory trends
• No Cultural Alignment found between 3PL and Client
• Focus on Lowering Costs over Exceptional Customer Service
• 3PL losing focus after a big acquisition or merger

Its about that time of the year again. Inbound Logistics (one of the leading publications serving the warehousing and logistics industry) has announced their annual Top 100 Third Party Logistics providers awards.

I think the best thing about this annual issue is that they don’t only focus on the behemoth’s in the 3PL industry. Of course they have the usual suspects like APL, Kuehne + Nagel, Bax Global etc.. but they also go out of their way to get a full snapshot of the industry and shine light on some of the smaller and medium sized players that are also best in breed.

Click here for IL’s Top 100 3PL List

This week there was a great interview (subscription required) with George Jones CEO of Borders in the Wall Street Journal where he discusses the company’s decision to move their Ecommerce business away from Amazon and strike out on their own.

Regarding the original outsourcing of their e-commerce site to Amazon he said:

“The decision to let Amazon do our e-commerce site was made years ago when there were completely different economics involved. There weren’t the options for third-party fulfillment that there are now.”

That is an interesting point for a lot of organizations that have been postponing an e-commerce play or have completely outsourced their site to another company. Third Party Logistics providers have continued to build up their competencies in e-commerce fulfillment and additional value add services giving companies more options to realize savings and drive revenue. This opens up a lot of new possibilities; especially for business initiatives that didn’t make sense just a few years ago.

Purchasing.com has a good article describing a company’s move to outsourcing their supply chain to a third party logistics provider. Its always important to find a reputable 3PL provider that has a good reputation in the industry and that stands behind their services and commits to providing clients with exceptional support.

The logistics industry is home to many outstanding organizations providing top notch warehousing and transportation services and all it takes is some research and networking with your peers to find out who they are. Whether big or small, there are a variety of logistics providers in different shapes, sizes, and structures to meet the challenges of your supply chain.

Check it out here: Choose Wisely Not All Third Party Logistics Providers are the Same

Are you considering moving to a third party logistics provider?

Here are some questions to ask before you start the 3PL search

1. What are your reasons for outsourcing and are they the right ones?
2. What kind of budget are you working with and is it realistic?
3. What are you looking to accomplish? (ex. optimize a seasonal distribution program, take advantage of a multi-location provider)
4. Where are you now with your current Supply Chain and where do you want to be?
5. Do you have a detailed understanding of your distribution program and inventory to enable you to speak intelligently to competing logistics providers?

These are just a few of the many things you should have sorted out so that you can be in the best position to represent your business and find a warehousing or logistics provider to meet your needs.

Related Posts
Reasons to Outsource Warehousing
Why Outsource to a 3PL?
Selecting a Logistics Provider Without an RFP

I just came across a great article in DC Velocity that details the increasing degree with which 3PL providers are becoming selective of their clients.

Check it out here: Third Party Logistics, Sorry You’re Just Not What We’re Looking For