5 Considerations When Choosing a 3PL Partner
You want to make sure you select the right 3PL partner who can provide the services you need at the right price. But how do you go about doing that? Here are five considerations when choosing a 3PL partner that you should keep in mind.
1. Experience and Expertise
When you’re looking for a 3PL provider, you want someone who knows what they’re doing. You don’t want to be the guinea pig for a 3PL that’s still learning the ropes. You need someone with experience and expertise.
It’s best to go with someone who has plenty of knowledge dealing with different sales channels and logistics. It’s also great if they’ve already worked with other companies like yours, so they can replicate processes that have already been tested and proven.
Specific industry and supply chain challenges
Many industries have unique supply chain obstacles that require specific expertise. Here are a few examples:
- Meeting the unexpected demand the pandemic caused was a huge challenge, as managing high order volumes requires careful planning and resource allocation.
- When it comes to retail and CPG, it’s hard to predict customer behavior, which makes it tough to manage inventory.
Getting true and complete visibility is hard to come by when all your systems aren’t connected.
- If a large portion of your budget goes to fuel, fluctuating fuel prices can cause you to cut into the company’s profits, especially when drivers are traveling more than necessary.
- The lack of communication and integration between shippers, carriers, and customers harms the operation of the supply chain.
- Driver shortages have been one of the primary concerns for years due to a lack of qualified drivers for open positions.
Evaluating experience and expertise
With omni-channel retail no longer being an option but rather a necessity for businesses, it’s essential to find a 3PL provider that understands the intricacies of omni-channel commerce without sacrificing the customer experience.
That’s why you need to partner with a reliable provider that has: a well-established business model, systems that can be adapted to different channels, a track record of success, and experience in your sector.
2. Technology and Infrastructure
Not having the right infrastructure makes it difficult to manage multiple departments in one space. Technology is the backbone of logistics, and the infrastructure supports the technology. Both of them are very important in logistics operations because without the right tech, it will be difficult to do the logistics, and without the right infrastructure, the technology will fail.
- Automating processes like routing, customer communication, and reporting can help 3PL companies work more efficiently with their customers and reduce expenses and labor.
- Investing in real-time visibility allows 3PL companies to stay one step ahead of any potential issues by keeping track of their processes and services in real-time.
- Integration makes data transfer easier allowing 3PLs to solve your delivery problems efficiently and optimize your processes.
By investing in and using advanced delivery management solutions, they can reduce the amount of time and money wasted, all while making sure you’re happy.
Evaluating technology and infrastructure
It’s crucial to evaluate the reliability of a 3PL by seeing if they have the latest logistics technology. Newer tech helps 3PLs do their jobs better and makes operations flow more smoothly. This will benefit your business and customers by making everything more efficient.
Even if you’re a small business now, you want access to sophisticated technology because you may want to grow in the future. This means you need a dashboard to increase transparency, and it should be user-friendly. Ask to see it before you commit to the 3PL.
3. Flexibility and Scalability
A 3PL partner that can handle a business’s needs as it grows is vital to their long-term success. This is why flexibility and scalability are important factors to consider when searching for a new 3PL partner. If a company wants to make sure that their logistical needs are met in the future, they should consider a 3PL partner that can grow with their business.
Evaluating flexibility and scalability
Flexibility and scalability are must-haves when it comes to a 3PL partnership.
- You’ll want a 3PL that can handle your current logistics requirements, as well as your future needs while your company is expanding.
- A reliable 3PL should be able to help you grow and enter new markets.
- Look at what your 3PL provider can offer you; the more services they can provide, the smoother and more scalable your operations will be.
- Speak up for your company and find out what innovative solutions they can tailor to your needs.
If your 3PL can’t keep up with the bigger order volume, the relationship won’t be successful. A 3PL that can’t scale up won’t be able to handle the increased number of orders, leading to storage problems and delayed deliveries.
More orders will probably influence the 3PL to focus only on fulfilling orders, neglecting other aspects such as the customer’s post-purchase experience. They might make packaging errors and won’t be able to give all customers order tracking info. This will result in a lot of complaints and bad reviews, discouraging potential buyers.
4. Customer Service and Communication
Customer service and communication are two of the most important elements of any 3PL provider. When selecting a 3PL, prioritize one that focuses on continuous improvement. Ask yourself if they offer accessible, top-notch customer service. You’ll only reach success if your fulfillment partner is equally motivated for excellence.
How to evaluate a 3PL partner’s customer service and communication
You can get a good idea of how well a 3PL partner can handle customer service by looking at their customer review and complaints. A good 3PL partner might have a few negative reviews, but they will be few and far between.
- They should be quick to answer your complaints and requirements and interact with you regularly.
- 3PLs should be able to communicate with your customers while maintaining the same level of professionalism you expect.
Sub-par communication and customer service from your 3PL can leave your reputation in tatters. Not only will unhappy customers take to social media to air their grievances, but they will also churn and cost you more money in CAC. These are only a few of the many effects of poor customer service.
5. Cost and Value 3PL
A great 3PL partner can help you leverage postponement strategies and help you optimize inventory while still delivering great service. Building to order instead of keeping stock on hand can cut down on production and inventory carrying costs. This is the value 3PLs bring.
Evaluating cost and value
It’s smart to ask your logistics provider for a comprehensive list of prices from the start so you don’t get blindsided by hidden costs. Remember that add-ons can really add up, so work out the fees for special services in advance.
- Focusing on cost alone can lead to a bad deal by leaving out the services you need to stay within a tight budget.
- The supplier might not be unable to deliver the goods on time or in proper condition.
- The client could be left with goods that may not have been worth their price because you’re passing over 3PL fees to the customer.
However, when the focus is on value, the main goal and priority are to create a great customer experience and to meet and exceed expectations.
How Teksetra Can Provide the 3PL Partnership Your Business Needs To Grow
Businesses need more than just a great product or service to be successful. They need the right partners to help them succeed. Look around! You just found Teksetra, an experienced team with decades of industry knowledge.
We have the infrastructure and resources to handle all aspects of the supply chain and we can provide complete transparency on our operations and processes.
Partnering with Teksetra is partnering with a team that’s committed to the same values as your company. Get in touch with us today to see why establishing a relationship with us is in your company’s best interest.
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