If you have decided to outsource some of your supply chain functions to a third party logistics provider, finding a company that can provide the logistics or fulfillment services that are needed is the next step.
One of the main responsibilities of a third party logistics company, or 3PL, is to look after a portion of, if not all, of a company’s supply chain. And to ensure that a product completes its journey. Selecting a 3PL can be difficult due to the fact that there are many aspects to take into account when deciding on who will take over these functions in your business — and requires research on your part to ensure that you’re choosing the right company to handle the specific supply chain needs that your business has.
Here are a few things to consider during your 3PL selection process:
- Bandwidth – If you’re a newer company with moderate to aggressive growth goals, you want to be sure that you choose a company that can grow with you. Will the 3PL be able to handle it if your company rapidly doubles or triples in size?
- Goals – It’s important that the 3PL that your company chooses is on the same page. Defining the expectations of the relationship at the outset will reduce the chances for misunderstandings by operating toward the same goals — and will also help both parties to outline a clear process from the outset. Be prepared to ask a lot of questions during your vetting process to ensure that a 3PL is the right fit for your business.
- Stability – Looking into a 3PL’s history and it’s future goals. When choosing a 3PL, the goal should be that your business grows with that company. Choose one that has solid business practices in order to mitigate the chances of the company going out of business.
- Value-Added Services – Is the 3PL a one-stop shop? Does it offer services that will benefit your business as it grows such as customs clearance, freight forwarding or anything else that will help to oversee the supply chain and result in efficient and cost-effective services?
- Like-Mindedness – Last, but certainly not least, it’s important to look for values in a 3PL that are similar to those of your business. A 3PL may become an extension of your business, and because of this might be client facing — in one capacity or another.
Hiring a third party logistics provider can be an invaluable, strategic step for companies, and should be thought of as a strategic part of an overall business strategy. To do this, choose a 3PL that operates on the principles of clear alignment with business goals, customer objectives and ensure that you have no conflicts of interest with the company that you choose to partner with. This partnership should ideally be built on trust and one that fosters alliances over time that create business opportunities and growth.
Studies have shown that a majority of people do research online prior to speaking to companies or making any business decisions. Due to this, ideally, 3PLs will include all of the pertinent points of information above on their website.
If you’re in the process of choosing a 3PL partner, be sure to consider the five points listed above. Thanks for tuning in to read our blog today. If you have any questions, do not hesitate to reach out.
