AWI - Outsourcing Advisor

How to get an objective measure of a 3PL's capabilities?

Posted by Mark Richards on Mon, Sep 08, 2014 @ 10:17 AM

evaluating third party logistics, warehousing, and fulfillmentOne of the most challenging aspects of selecting a third party provider is being able to evaluate what is largely an intangible product – warehousing and logistics services.  Just to be "in the game," third party providers must have the tangibles covered - clean buildings, a solid WMS (warehouse management system), reliable equipment, and knowledgeable staff. 

Adding to the challenge is the fact that third party providers have come a long way in being able to tell their story.  In short they have become better marketers.  As a result, it continues to be a challenge to assess what third party provider will be the best fit for your unique needs. 

There is no easy solution.  However, one of the easiest ways to begin identifying 3PL companies that may be a good fit is through some of the independent listings of the top third party providers selected by the trade press.  As an example, one of the organizations that provides a list of the top logistics providers is Inbound Logistics.  This trade magazine publishes two listings each year, one identifying the top 100 providers and one that identifies the top 100 3PL and cold storage providers.

Although there is much more to consider when identifying the best third party provider for you, lists like this can be a good resource and provide some objective insight on those providers who are among the best of the best.

We’re pleased to say that 10 companies, who are part of the AWI or Associated Warehouses network,  were among the list of the top 100 companies identified by Inbound Logistics in 2014.  These include:

 

 

 

Tags: Announcements, third party logistics, 3PL, logistics services, outsourcing, fulfillment, outsourcing 3PL

The Search for an Outsourced Logistics Partner, Starts by Searching Within

Posted by Mark Richards on Tue, Nov 10, 2009 @ 12:59 PM

searching for third party servicesWe live in an age when most of us have more things to complete, more KPI’s to measure and report, and more goals to achieve than we can get done with the time we have available.

As a result, when faced with the challenge of finding a third-party provider who can best meet our needs it's easy to fall into the trap of bypassing the critical step of self inspection.

Instead, we jump ahead, look for the easy answer, the quick fix, and often make a sub optimal choice of who will become our outsourced third-party logistics service provider.

Then, one month later, six months later, or year later when we have a special request that cannot be met, or we received a call from one of our customers saying they are no longer buying from us because of an issue with the service being provided by our outsourced distribution and fulfillment partner - we recognize the cost of rushing the process.

The cost of rushing the process can be significant. The disruption it can cause, the waste, and the loss of business can be devastating.  In addition, the resources required to resolve the issue and earn back the trust lost when the outsourced distribution services provider does not live up to expectations can be tremendous.

One of the lessons a manager I worked for early in my career used to constantly remind us of was this – “If you don't have time to do it right the first time, when will you find time to do it right in the future.”  He could not be more right - especially when it comes to searching for an outsourced logistics provider.

Although it takes time, which we often feel we do not have, it is critical that you first understand your business, understand the needs of your internal customers, and understand the expectations of your external customers before you begin the search for the third-party logistics service provider who will be the best fit for you.

The famous author of the bestseller "The Seven Habits of Highly Effective People" Stephen R. Covey framed this critical first step another way when he counseled us to - "Seek First to Understand, Then to be Understood."  Although I don't believe Mr. Covey was thinking about selcting an outsourced 3PL patner when he developed this advice, the process of taking the time to understand our organization, our needs and requirements, and the needs and expectations of our customers will not only help you make the right selection of a outsourced partner the first time, it will earn you instant credability with any 3PL you invite to create a proposal for your business.

It is largely a matter of luck when someone selects a third-party distribution partner and has a successful relationship without first going through the step of searching within and understanding their business and requirements.

So, where do you start?  First, make sure you have involvement and input from all of the functional areas who could be impacted by the decision of what to outsource and who will be your third party partner.

Persons at various levels within each functional area should then be asked: A. What do you like least?   B. What do you like best about our current process?   C. What capabilities or elements are absolutely necessary, should be available, would be nice to have, or are not necessary at all?

Once you gather the results, these can be reviewed with each group and consensus reached on the objectives of your outsourcing strategy and the criteria you will use to rank the third party service providers considered.

Next, develop a profile of your business including general information about your company, some of your specific operational requirements, and characteristics associated with handling your business.

All reputable third-party providers have a client profile which they attempt to complete with a prospect of client in order to generate a complete and accurate proposal. Many of the operational details needed by a third-party provider in order to generate a quality proposal will be found on their client profile survey. Click here for sample of a typical client profile survey.

Please contact us, If you would like some assistance with the process of gathering the information needed by a third-party provider to ensure they can generate an accurate and complete proposal.

Bottom-line, to increase the probability that your search for the best third-party logistics services provider for you will be successful start by searching within. You'll be glad you did.

Tags: third party logistics, public warehousing, logistics services, outsourcing, outsourcing 3PL