10 Tips: Choosing a 3PL
Selecting a third-party logistics (3PL) provider is a strategic business decision so treat it that way. Your 3PL should be a catalyst for producing unmatched retail logistics performance levels and total supply chain optimization. Here’s how to choose the right partner.
1. Consider the Advantage of Asset-Owned Providers. An asset-based third-party logistics provider owns and operates its trucking fleet, warehouses, and proprietary analytics technologies. Ownership of assets eliminates middleman costs passed on by 3PLs that outsource their warehousing and trucking. Suppliers benefit from improved control, the ability to pivot quickly, and increased supply chain efficiencies.
2. Focus on One Strategic Region. Centralized warehousing and inventory control produce economies of scale throughout supply chain operations. By controlling inventory from one inventory location, suppliers avoid redundancies at multiple warehouses, reduce overall operational costs, improve efficiencies, and achieve a more consistent product flow to store shelves.
3. Leverage Retail Consolidation. Consumer product goods (CPG) suppliers share truckloads with other customers to create a single, full truckload to the same retailer distribution center. It’s a simple concept that yields immediate cost savings, decreases carbon footprints, and improves overall supply chain performance. Importantly, it also improves compliance to eliminate retailer fines while increasing in-stocks and line extensions.
4. Turn Insights into Meaningful Action. Real-time visibility and access to critical data is essential for improved decision-making and supply chain optimization. Working with a 3PL that offers an advanced analytics platform to improve transparency, control, and real-time insights is critical in today’s business climate.
5. Embed Sustainability Across the Chain. Your 3PL partner should be a catalyst for helping suppliers integrate supply chain best practices that reduce operational costs, decrease environmental footprints, and produce a greater return on investment.
6. Invest in People. Work with a 3PL that has invested in subject matter experts with functional areas of expertise who own deep categorical and industry knowledge.
7. Benefit from Value-Added Services. From labeling to repackaging to merchandiser assembly and more, 3PLs should offer value-added services that reduce overhead costs and turnaround times. This allows suppliers to focus on growing their businesses.
8. Look at Retailer Relationships. Your 3PL partner should have deep relationships with today’s retailers that provide you with insights to drive seamless integration into retailers’ systems. This access to critical knowledge drives process optimization, while developing stronger relationships to increase retail presence and sales.
9. Examine Retailer Compliance. On-time and in-full shipping standards will only continue to increase as more retailers adopt stricter regulations to meet consumer demand. Your 3PL should have a pulse on each major retailer’s evolving compliance demands—and the logistics solutions to help you meet them.
10. Vet to Make Sure Retail Logistics Are Mastered. With ever-increasing demands and disruptions, put your supply chain in the hands of a retail logistics expert. Conduct due diligence to research, vet, and select a 3PL partner that can grow with your business.
Source: Greg Forbis, Executive Vice President Strategy and Business Development, RJW Logistics Group