Your New Year’s resolution might be to switch third-party logistics providers. But how?
By Visible Supply Chain Management · November 22, 2019
For many businesses, the fourth quarter is vital. It’s when 50% of their volume happens. This, together with compressed timeframes, make it the ultimate test of any supply chain. It’s when many realize their third-party logistics provider isn’t working for them. For instance, there is nothing more frustrating than correctly fulfilling over 100,000 orders on time, the week before Christmas, only to have those pallets left sitting on the loading dock because the mail carrier isn’t prepared to pick up that many deliveries.
However, the inability to keep up during spikes and seasonal surges is often just one of the indicators that a switch is needed. Upwardly spiraling costs of everything from packaging to shipping; increasing complexity of fulfillment needs; changes in order volumes; less than transparent billing practices and package tracking; incompatible provider technology; a lack of round-the-clock dedicated support and, of course, flat-out service failures, are all valid reasons for a company to make a move to greener pastures. Especially when you factor in the upside of getting it right for your customers and your bottom line.
First and foremost, don’t leave yourself exposed.
The timing of a transition of this magnitude needs to be carefully planned. It should coincide with a traditionally slow period of operations, when mistakes will be less likely to turn into catastrophes. Another way to transition is to test the waters with a new product line, or when entering a new market. However, in severe service failure cases, where the operation is in peril, an immediate change is warranted.
A seamless transition requires clearly defining processes to uphold service levels, control costs, and maintain speed-to-market expectations. The right 3PL will help you assemble a transition team of key players, from across all departments, to ensure everything goes smoothly. Then they will help implement the transition plan, monitor progress and budgets, provide ongoing communication, manage customer expectations and implement contingency plans as needed. Above all, make sure you know who you are switching to, before ending a contract with your current 3PL.
Do your research.
No matter how well laid your plans, switching 3PLs isn’t easy. Supply chains are complex, with many moving parts—each part affecting all the others. Look for a partner that can see your big picture and has a thorough understanding of all the small ones that make it. Yes, a “partner”, not a vendor, or you’ll probably end up searching again soon.
Only a partner will take the time to get a thorough understanding of your business, and your industry… without that they just become another widget supplier. As with so many things in life, relevant experience counts. A 3PL who has done well with other clients, is not an indication they will excel in your business space. Some focus on direct to consumer companies, others on apparel, others on food and beverage, and so forth. An important part of your research is to discover a 3PL that fits your company’s unique needs. Then go deeper.
Tour their facilities, meet and get to know the account managers, line supervisors, billing staff… everyone who will be touching your product and will be a contact for you. It’s the best way to ensure the chemistry is right. Plus remember, all 3PLs have problems, no matter how good they are, so ask the leading question: How does it handle problems? Because, in the long run, that’s what will make the biggest difference for your business.
Don’t jump out of the frying pan, and into the fire.
If you’re going to go through the trouble of switching, make sure your new 3PL is better for your company going forward. Talk to a provider who asks the right questions before giving you answers, on every area of operation, from factory freight to final delivery.
“How is it done? Why is it done that way? What are the results? Are there efficiencies to be had? What is the end-customer experience like?” Those are the sorts of questions a new partner should be asking. They’re exactly what Visible asks before beginning any new engagement. While we ask through the lens of our experience and expertise—we have no preconceived solutions. We start with a blank slate to be filled according to your needs. Someone coming to you with pre-packaged answers to problems they don’t even understand yet, is a huge red flag.
Then, to confirm all that input, your new 3PL candidate should do a deep dive into the workings of your supply chain. At Visible, we offer free audits for exactly that reason. Often, thanks to our proprietary advanced metrics, we uncover more issues than companies were aware of. The reason why we’re one of the country’s fastest-growing supply chain management companies is our ability to turn reams of supply chain data into actionable insights. We realize we can’t be everything to every company. Our strength is the ability to scale rapidly during periods of unexpected demand peaks, and seasonal spikes. We have some of America’s top specialists in packaging, logistics, fulfilment and shipping, and we’re perfectly comfortable with clients cherry picking from our services.
Look for success in a 3PL.
Visible Supply Chain Management has grown organically through the growth of its clients. Whether it is our team or not, we always recommend you still find a partner that puts the success of its clients first. They’re more likely to go that extra mile for you. Our investments in the technology, tools, facilities and experts required to reimagine supply chains through superior analysis, has led to success for everyone involved. But not just by our definition of it. We’ve been recognized by dozens of organizations with numerous awards, the most recent being Ernst & Young’s Entrepreneur of the Year in Distribution and Manufacturing.