Many people in the market for outsourced logistics services are looking for more information on makes a great 3PL. The first thing for you need to get a firm understanding of is what a 3PL is and what they are not. Then take a deep look at what you are truly looking for in support of your supply chain. Maybe you think you are looking for a 3PL but what your organization needs is a 4th party logistics company.
What kind of 3PL services do you need?
In the beginning you need to do your homework to understand what services you truly looking for. How many pallets of product are you looking to store? How often will the product leave the warehouse or “turn” as it is known? There will be certain 3PLs that are stronger for larger operations vs. lower volume engagements. Also, once you get estimates seriously look at whether you could run the fulfillment operations yourself cost efficiently.
What kind of logistics vendor will your company work best with?
If you are a smaller operator many times (but not always) the largest 3pl companies may not give you the attention and support that you are looking for. Take a look at the types of companies that the 3pl works for to get an understanding how your business will fit into this vendors overall client portfolio. As you get further into the selector process ask for references from companies they work with similar to yours. There are the obvious questions like is your product perishable or require refrigeration (If so there are companies that specialize in this segment) Do you have strict security requirements? (typical of consumer electronics and other segments, if so there are 3PLs who will have stronger capabilities than others)
What technologies do they use?
How do you use technology today as part of your supply chain. Are you already using software solutions that you need support/compatibility for. Are you looking to get upgraded logistics technology as part of your partnership or will basic EDI/RF technology meet your needs?
What kind of cultural fit is there?
What is your company culture, ex: established organization with ingrained process, fast paced startup? When talking with prospective 3PL’s you want to get a sense for whether these are the type of people that will work best for your company and whether their working styles are compatible.
How does customer service and communication factor into these offerings?
What does their 3PL customer service offering look like? Are you looking for the 3PL to provide white label customer service and speak directly with your customer base? If so you need to look for a company who specializes in this. What level of communication are you looking for with your vendor? Some vendors work to rely more on technology over classic communication which can work very well if this is aligned with your organizational culture, but be sure to be upfront about what you are looking to achieve to find the best fit for your company.
Like many complex business to business services it is never easy to say what makes a good 3PL because it really does vary based on your specific needs. But there are underlying themes like technology, customer service, culture that once you understand where they fit into your priorities you will get a better feel for what companies will be a good fit and which would work better for companies with different logistics requirements.
Need help finding the right logistics provider for you? Get help prescreening logistics vendors and get competitive quotes here