Selecting a third-party logistics provider (3PL) can bring expertise and logistics best practices into your supply chain. A 3PL can introduce efficiencies into the supply chain that can reduce costs and relieve resource constraints. However, choosing a 3PL that fits your organization can be challenging with a variety of factors and services.
First, it is important to understand what your expectations are of a 3PL and what you are trying to accomplish.
SERVICE CAPABILITIES: Don’t just think of what type of services you need today but what are the possibilities for tomorrow. When there is a broad range of services offered, there are opportunities to perform value-added services at the warehouse eliminating multiple vendors and transport costs to other facilities for rework. If compliance is high on your list due to product requirements, make sure your 3PL partner is compliant-ready and able to recall products if necessary.
CULTURAL ALIGNMENT: A cultural fit between both organizations will build a solid foundation to the longterm relationship. Cultural alignment is the cornerstone to working efficiently and effectively throughout a myriad of situations.
COMPANY STABILITY: Selecting a 3PL and moving inventories into their facilities is a costly endeavor. Not an event you want to do frequently. So, make sure your partner is financially stable.
RELIABILITY: You want a seamless process in your supply chain so ensuring that your 3PL can service and satisfy customers is on the “must have” list. Since the 3PL will be representing your organization as an extension of your business, determine if they are trustworthy and will aid in retaining customers and creating brand loyalty. Talking to customer references will give you an indication of customer retainment.
LOCATION: Your 3PL needs to have facilities in strategic locations that support your customer base. Also, how long have they been in the market? Each market has uniqueness to it and having a partner who understands the ins-and-outs of the markets they serve can be a great advantage.
TECHNOLOGY CAPABILITIES: Technology is necessary in today’s 3PL world. Select partners who continue to invest in their technology. These investments show a motion of efficient processes and reduced costs. Warehouse Management Systems (WMS); Transportation Management Systems (TMS) and Electronic Data Interchange (EDI) are all now basic approaches to 3PL organizations.
SCALABILITY: Scalability can address several areas. Make sure your 3PL has the ability to grow with your business. You want your partner to be flexible and agile as that growth occurs in labor, technology, services, space and potentially locations.
PRICE: While the cost of services is a necessary evil, don’t make it the driving force in your selection process. Remember you may get want you pay for! Select a 3PL that offers you the best balance of your “must have” characteristics. But also make sure this organization you select has a belief in continuous improvement. This shows you their commitment to managing their costs and providing cost-effective services.
QUALITY: Quality can go hand-in-hand with price. Determine if your 3PL tracks their performance and is committed to providing quality service to their customers. Tracking performance with metrics and scorecards can, again, show you their approach to improving their service and not managing their business in a status quo basis.
Pacific Coast Warehouse has been serving customers in the southern CA market for over 90 years. We understand the market and its consumer base. PCWC develops scalable solutions in warehousing, transportation and value-added services that allows our customers to grow and expand their services. We use our systems for tracking and generating efficient processes that allow us to maintain our costs to our customers. Our focus is on our customer and ensuring our performance meets their expectations in accuracy and cost. Customer Care is Job #1.