Evaluating 3PL Candidates

The potential for third party logistics (3PL) is easy to grasp; achieving this potential is not always easy.

3PL is using others to provide all or some of the logistics functions. It can offer flexibility, relieve frustration in managing non-core competencies, save money, and improve customer satisfaction. Or, it can reduce flexibility, contribute to frustration in core competency areas, cost money, and result in poor customer satisfaction.

In other words, all outsourcing is not wonderful.

A key to achieving 3PL success is the evaluation of 3PL candidates. The following criteria should be considered in this evaluation:

Customer satisfaction: Check references and perform site visits to the 3PL and its customers. Will the provider seek input from your customers and use it to improve the level of satisfaction? Can the 3PL maintain or even exceed your customers' current levels of satisfaction?

Warehouse management systems: Does the 3PL use information technology effectively? Can it develop, install and operate a better system than what you use now? How will your systems and the 3PL's systems mesh?

Flexibility: Can, and will, the 3PL adapt to you and your customers' changing needs?

Buildings/facilities: Consider availability, location, and utilization of dock capacity, lighting, personnel services, fire protection and outside services.

Financial depth: Does the 3PL have top-flight credit and bank references? Is the financial statement solid?

Geographic location: Is the 3PL's location a strategic advantage for you?

Personnel depth: Are there enough people with enough experience to keep you well-serviced?

Continuous improvement philosophy: Does the 3PL embrace and practice continuous improvement at every level of the operation?

Cost: Is this 3PL's price the best compared with other candidates that could do the same job?

Don't go about exploring 3PL alone. Learn more about how to evaluate a potential provider. Download Tompkins Associates' FREE monograph by clicking here.

Tompkins Associates helps clients achieve Supply Chain Excellence through our unique supply chain consulting and integration solutions. For more information about our company and services, visit http://www.tompkinsinc.com/.

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