It began in the 1980s. Businesses took off, thanks to globalization. And soon, they were establishing their presence in multiple countries and catering to a wide network of customers. Once a global business was set, the next step was to find a way to physically move goods and products across borders. Initially, courier services served the purpose. But as with everything, the process time shrunk and expectations grew bigger. Currently, almost every organization guarantees delivery within one to two days
This has led to an increased demand for 3PLs (Third-party Logistics), and for good reasons. Using 3PLs have helped numerous companies achieve operational efficiency by outsourcing complex supply chain functions to the experts, thereby adding to their profits. While the case for using a 3PL needs no justification, many find it difficult to select a provider, thanks to stiff competition. For those who are in this position, here are the top five factors to keep in mind before finalizing a 3PL.
1.Look for a track record
How many companies have they served? What does their success rate look like? How many years have they served individual customers? If a 3PL has been with a certain organization for a long period, then they are probably doing something right. You can also browse through their client list and reach out to those customers to get a first-hand opinion.
2.Think in terms of flexibility
Of course, this is considering that you’re aiming for a profitable business that’ll last indefinitely. Your requirements today will change tomorrow, as your business improves. The number of warehouses or fleets of cargo you need today may not be what you need tomorrow. Find out if the 3PL can handle and adapt to your changing and growing requirements. Check with referrals or past clients to identify if they can aid your business in the most cost-effective and efficient manner.
3.Are they familiar with your nature of business?
The nature of supply chain services involved in a pharmaceutical company, say Novartis, is very different from that of the retail grocer, Amazon Fresh or fashion label, Zara. Certain 3PLs specialise in a given industry or a vertical. The in-depth knowledge of a particular business allows them to understand the intricacies involved, and they’re much more likely to enforce this in their services as compared to a general 3PL. When vetting a 3PL, this is one of the top points to consider.
Technology has become an inevitable part of every business and if you’re looking towards a long future, you’d want to make it a part of your business as well. The same goes for 3PLs. Given the complexities of the supply chain network, it is essential that the right kind of technology is used. This could be an application that helps a shipper connect with a 3PL or a real-time data sharing interface for last mile deliveries. It is vital to ensure that the prospective 3PL has advanced technological integration within their system.
5.Check their Accreditation
Just like you’d look for a certification on a gadget or canned food, check if your 3PL is certified. Look for tags like the ISO 9001 which is a QMC (Quality Management System) for organizations that provide consistent and quality products/services. You can also check if the prospective 3PL is a member of the UKWA or The Chartered Institute of Logistics and Transport.