3PL Provider Procurement & Selection
Companies who outsource their 3PL to rid themselves of problem situations, accept the lowest third-party logistics bid or become emotionally attached to the idea of 3PL outsourcing overlook the important factors of outsourcing — factors such as leadership capability, commitment to technology, commitment to continuous improvement and the client/vendor relationship itself.
Analyzing Critical Elements
Making the decision to outsource third-party logistics can offer flexibility, cost savings and improved service levels of the supply chain when the outsourcing process is managed correctly. This same decision can also introduce reduced flexibility, increased spending and reduced customer service to the network if managed incorrectly. Assessing 3PL provider capability, flexibility and adaptability, establishing performance criteria (e.g. standards), defining information technology needs and defining cost and compensation structures are all critical elements to selecting and managing a 3PL provider once the decision to pursue outsourcing has been made.
Through our work in providing both operational cost analysis for 3PL service providers and evaluating 3PL service offerings, we have developed a costing tool to benchmark what 3PL distribution or fulfillment services should cost our clients. This cost-predictive model allows our clients to make the right choice based on their business particulars and needs. Our 3PL Selection Services will significantly enhance your organization's ability to decide which third-party logistics services and pricing are in your organization's best interest, and successfully transition warehousing, distribution, fulfillment and transportation functions to a 3PL provider.