Choosing the right 3PL provider doesn’t have to be difficult, but it does require some thoughtful consideration. After all, the third-party logistics provider you choose will have a tremendous impact on your organization’s costs, customer service, and supply chain for years to come.
Before you begin your search, you’ll need to do some corporate soul searching. Ask yourself these three important questions:
- What are your company’s shipping, packaging, and marketing priorities right now?
- Will these priorities be the same in three years, or do you anticipate them changing?
- What qualities are most important to you in an eCommerce fulfillment partner?
Third-party logistics no longer means simply transporting and warehousing goods. Most 3PLs have developed a host of services to meet the demanding needs of today’s modern manufacturers. Whether they specialize in a specific vertical or they are logistics generalists, most fulfillment partners will tout their sophisticated operations, good carrier relationships, and industry expertise, so you’ll need to look at these traits as foundational, not as differentiators.
Regardless of your industry, market, or location, there are 10 factors to consider when choosing the right 3PL for your operation.
Whether it’s kitting, multi-channel fulfillment, reverse logistics, subscription box services, or pallet displays, you need to know your 3PL partner has the capability to handle your changing needs. A 3PL may perform outstanding work in one service area but be unable to meet your needs in another. Do your homework and make sure your provider has easy integrations with your eCommerce platform of choice and can provide a business intelligence interface that allows you to make real-time, data-driven decisions at the click of a button.
How long a 3PL provider has been in business says a lot about its ability to provide high quality logistics and supply chain management services to its partners. Logistics is a constantly changing industry, so a provider that’s been around awhile has years of experience adapting to new market innovations and has likely led many of them. Look for a fulfillment provider who has staked out its place in the supply chain market and has a reputation for providing outstanding service.
Speaking of reputation, a 3PL’s reputation is everything in the fulfillment and logistics industry. Reputations are not only built around satisfied customers (although that’s the most important metric), they’re also built around happy vendors, carriers, and employees. You want a logistics partner that is well-respected, because when challenges arise—as they often do—reputable 3PLs will rely on their network, team, and industry relationships to find solutions.
- Safety and Security
How a 3PL approaches the safety of its operations and the goods and materials it transports speaks volumes about how it conducts itself as an organization. With safety regulations undergoing near-constant change within the industry, the right 3PL must stay up to date with the latest initiatives to remain in compliance. Beyond the protection of assets and the safety of personnel, you also want a fulfillment partner that takes security seriously, as well. Protecting data and safeguarding financial information is not merely important—it’s critical. Look for a provider that has PCI, FDA and DEA certifications, as well as a HAZMAT Shipping Certification.
- Customer Service
At the heart of your relationship with your 3PL is the service and attention your account receives. Third-party logistics providers that invest in customer service understand that service excellence and quality management extend both to the manufacturer as well as to the brand and its customers. Being able to quickly identify issues and effortlessly resolve problems is the hallmark of an effective 3PL. The right 3PL will provide business solutions that allow you to calculate cost savings, track products, and identify delivery times with ease.
Can you grow with your 3PL? It may seem like an obvious question, but the right partner will make scaling easier. If your operation is already operating at scale, can your 3PL handle the volume of products, recalls, and customizations necessary to maintain your operations and reduce costs?
Customization can mean different things when it comes to third-party logistics. When it comes to eCommerce, business-to-business, or retail distribution, for example, you need a fulfillment partner that can work in a multi-channel capacity, offering customized solutions that integrate seamlessly with your supply chain. On the other hand, when it comes to packaging and shipping, you’ll want a fulfillment partner who can customize the customer experience right down to the packing slip. The right 3PL will be able to act as an invisible extension of your brand, providing the same personal service and attention to detail that your customers have come to rely on you to provide.
Inventory accuracy, shipping accuracy, and order accuracy are all determined by the internal processes your 3PL has put in place over time. Customer satisfaction should be a high priority for your 3PL, and if inventory, shipments, or orders aren’t accurate, customers will be disappointed, and you’ll lose money on returns. When settling on a 3PL partner, ask them about their Warehouse Management System and their accuracy rates. If they’re not using the latest technology, or their accuracy rates are below 99.9%, you may want to look at other options.
Responsiveness is measured not only in how well things go during normal fulfillment operations, but in how well things go when issues arise. When doing your research and considering different 3PLs, ask them these important questions:
- How do they handle supply chain disruptions?
- How do they respond to changes in order volume, destinations, or stocking levels?
- How do they track products in the event of a recall?
Answers to these questions will give you valuable insight into the kind of company you’re dealing with and whether they can handle your logistics.
Logistics sophistication begins and ends with the technology supporting it. Every aspect of fulfillment depends on it, so the 3PL you choose should have enterprise-level technology that streamlines the process from order to delivery. Whether it’s integration with your order management system, business intelligence that allows you to make quick and accurate decisions, or an IT team dedicated to providing you with top quality support, make sure your 3PL uses the latest technology and has the best support team available to meet your needs.
LEARN MORE: Thinking about outsourcing fulfillment services? Contact the experts at Jay Group. Leading the fulfillment industry since 1965, today’s top companies and eCommerce retailers rely on Jay Group’s experience, customer focus, and enterprise level technology solutions to deliver the best possible experience to their customers.