What is a 3PL Partner?
A 3PL or Third-party logistics provider is a business outside of your own that assists or takes over processes such as distribution, warehousing, or fulfillment. In today's blog, we’ll be exploring how to find the right Third Party Logistics Partner, including what to assess both before and during your relationship.
- Your first steps should include research, asking questions, and auditing your potential 3PL's technology.
- Scalability, stability, and security are just a few key factors you should look for when choosing a 3PL provider.
- To ensure the best possible partnership, set expectations and follow through on disappointments.
In the last decade, the supply chain industry has grown significantly year after year and is projected to double in total market size in the next five years. With that growth comes more and more businesses trying to become involved. Additionally, with that growth comes increased specialization.
There are so many companies out there doing a variety of different operations in the supply chain space that the first step to finding a successful partnership is to do a bit of research into the companies that offer the services that you, as a supply chain manager, require. This research could include anything from visiting the company’s website, and reading reviews, to reaching out and requesting meetings or product demonstrations.
Your business is your livelihood, so no question is too insignificant when looking for a 3PL partner. There is no shortage of third-party logistic companies who can fulfill your needs no matter how specialized, so make sure to come prepared to meetings and demonstrations with questions to ensure that the companies you are considering can meet your needs.
Audit Their Technology
One of the most major reasons for a business to incorporate the use of a 3Pl partner is to enhance their business beyond themselves and their own. constraints, whether that be financial, technological, or experiential.
For a Third Party Logistics partner to best serve your needs their technology should be on the cutting edge of their specific industry. Technology includes both software and hardware assets, along with special niche technologies as well. Make sure that when asking questions and doing research that you keep this specific benchmark in mind or you may end up with a 3Pl partner using outdated or obsolete technology.
In a perfect world, 3PL partnerships are long-term relationships, so when considering a 3PL partner, it's important to consider the partner's ability not only to accommodate your business size but also scale with your business. Ensuring a partner can grow with you is a very important consideration to make when selecting a 3PL partner.
Volatility is a dirty word in the supply chain space. When choosing a 3PL partner, it’s very important to consider the stability of their business when making a long-term decision. Partnering with a long-standing 3PL business with many customers and lots of good publicity will likely be more profitable than taking a chance on a smaller, newer business that has yet to be truly tested. It would be unfortunate to have to reselect a 3PL partner after your current one shuts its doors, so ensuring your partner will be stable during any kind of interruption is essential when choosing a partner.
Your data and company plans are sacred and need to be treated as such by any company or partner given the privilege to handle it. Outside of keeping your data secure, your 3PL partner should also have all physical safety requirements met as well. Your business will operate best if not deterred by any stoppages from liability or security issues.
Every supply chain is unique as the next, and your business may have or will have some unique requirements to fulfill. The best 3Pl partners have flexible platforms and technologies that can be altered or customized to meet your business's ever-fluid requirements.
Much like scalability, you want the technology of your 3PL partner to grow with your company and with emerging trends in the supply chain space. To stay ahead of the pack, your partners should ensure that they strive to grow, adapt, and invent.
Much like scalability you want the technology of your 3PL partner to grow with your company and with emerging trends in the supply chain space. To stay ahead of the pack your partners should ensure that they strive to grow, adapt, and invent.
Getting it Right
The best way to set expectations is to have a set of KPIs or Key Performance Indicators that are shared between you and your partners. It’s important that the KPIs that you assign to certain partnerships are relevant and realistic. For example, if you are outsourcing your warehousing to a 3PL partner, it wouldn't make sense to hold them accountable to a KPI relating to fleet management.
Follow Through on Disappointments
Sometimes things don’t always go to plan. You did all your research, and you were certain that a specific 3PL partner was going to be a great fit, but in review, they missed the mark by a significant margin, and things have to change for your business to succeed. Leaving a partner can feel like a daunting task, but as a supply chain manager, you have to do what's best for your business. Sometimes leaving is not always the best answer, but something is going to have to change, and that needs to be assessed on a case-by-case basis.
What Role Routeique Plays
When looking for a 3PL partner, keep an eye out for Routeique during the technology audit. Routeique offers the cutting edge of 3PL solutions.
Routeique offers top-of-the line flexibility tailored to the specialized functions needed by 3PL providers. This ensures no matter the function the 3PL partner is looking to provide, Routeique has the ability to do it.
Routeique also offers unprecedented visibility into every aspect of the supply chain, this ensures that if your 3PL partner is using Routeique, nothing is going to fall through the cracks.
Choosing a 3PL partner can be a difficult task, but can also be a rewarding and profitable one if done correctly. Hopefully, following some of the methods outlined today will help you to better understand what you should be looking for in your first or next 3PL partner.