Get The Most From Your Third-Party Logistics Partnership
Third-party logistics is more than just a contract. It’s a relationship. On Time Delivery & Warehouse 3PL partners trust us to perform materials management and product distribution functions, but for us, it goes beyond that. We represent an extension of our client to their clients. Many shippers need customized offerings with a broad range of capabilities – encompassing freight shipping, trucking, warehousing and distribution. We deliver that. Ultimately, though, it’s about forging a long-term, mutually-beneficial accord.
Finding the Best Cleveland 3PL Partner
Market research released by IBISWorld last month revealed there are nearly 19,000 third-party logistics providers in the U.S. – a figure expected to grow the next five years, given the uptick in consumer spending, industrial production and trade. Northeast Ohio and other areas around the Great Lakes are concentrated in 3PL providers because of the high volume of manufacturing, trade and other commercial activities.
That means shippers have an array of choices in third-party logistics options. Choosing the best for your needs means weighing a host of factors (i.e., expanse of valuable carrier networks, service areas, supply chain and freight costs, freight accounting, performance auditing, punctuality, scalability, financial strength, responsiveness, technological tools/ data-sharing, excellent industry references, corporate culture, etc.). However, evaluation of the third-party logistics relationship shouldn’t stop once you’ve signed a contract.
Measuring the Success of Your Third-Party Logistics Relationship
Just like any other relationship, making it work with your third-party logistics partner requires us all to be on the same page with clear expectations.
Successful 3PL contracts will deliver on:
- Performance. In one recent study by Finnish researchers with the Transportation Research Procedia, study authors generated a simple framework to measure service level of delivery (known as On Time in Full) evaluating the number of correct and complete orders delivered on time. Regular reviews of this element are important.
- Value. Periodically examining your cost-versus-savings with use of a third-party logistics firm will help you determine if the relationship is on a track for sustained viability.
- Flexibility. Many companies need a firm with a clear means of adjusting your contract or the scope of work performed as the business evolves.
- Innovation. What kind of technology software is the 3PL using to track inventory and shipping? Is it the best, or at least the most efficient to serve your needs and maximize value?
- Communication. Part of this goes back to innovation. The ability to glean real-time data pertinent to your operations is often mission-critical. Having the ability to log in instantaneously and follow the supply chain flow means you – and your third-party logistics partner – can more swiftly identify and address bottlenecks and generate short-term planning and forecasting.
- Responsiveness/ Personal Service. If you have pressing issue or concern, can you get a rapid response from someone who is knowledgeable and competent? Many supply chains are complex and problems may inevitably arise, but you need to know your 3PL will be responsive in helping quickly guide you to a satisfactory resolution.
- Technical Competence. Is the firm experienced? How many years have they been providing contract logistic services? Does the management have a depth of experience? What is the quality of the workforce? Is the operating management system strong?
- Equipment. Do they have the warehousing space, fleet size and appropriate tools and technology to carry out essential functions – and go beyond that if you grow?
- Integrity. Do you trust your third-party logistics provider to uphold the values of your business? Does the 3PL appreciate they are an extension of you and treat your customers with the same care you would offer?
- Long-Term Strategy. Does your 3PL have a long-range plan for helping you maximize savings, efficiency and customer satisfaction while also minimizing costs and supply chain weaknesses?
All of these factors should be weighed at the outset of your establishing a third-party logistics partnership, but must also be revisited on a regular basis to make sure you’re still getting the most from the relationship.
If you have questions about Cleveland 3PL third-party logistics partnerships, contact On Time Delivery & Warehouse by calling (440) 826-4630 or sending us an email.
Evaluating the Performance of Third‐Party Logistics Arrangements: A Relationship Marketing Perspective, April 5, 2006, Journal of Supply Chain Management
More Blog Entries:
E-Commerce Rise Shifting Demands to More Efficient 3PL Warehousing, Feb. 15, 2018, On Time Delivery & Warehouse 3PL Blog