Finding The Right Partner

Take the time to do a thorough and accurate job when evaluating potential logistics providers.


"Beyond just performance numbers, though, you should also use the discussion of KPIs as an occasion to ask about how they handle the exceptions. When trucks aren't on time, for example, how do they handle the situation? What's the communication like, and what's the availability of their staff to deal with the situation?

"Or on the subject of loss and damage claims, what programs do they have in place to help mitigate those risks?

"And what is their carrier scorecard? How do they qualify and evaluate the carriers they'll put on your loads?"

According to Melville, the single biggest measure a customer should look at is year-over-year continuous improvement in performance by the 3PL, "because that's something that the provider has control of."

The RFP

One good reason not to send out too many RFPs is that the proposals requested should be as detailed as possible.

For a warehousing project, for example, says Cook, "You'd want to start by talking about inventory levels, activity by item, SKU seasonality. You want to share all of that with the 3PL provider over a representative period of time, along with receipt and order characteristics, special storage requirements and any other unique requirements a customer might have

"If their customers have certain specific requirements, in terms of labeling on products, or advanced ship notices, all this needs to be conveyed to the 3PL upfront as well."

Depending on the specific situation, though, there may be some situations where an RFP can be too detailed.

"Sometimes these proposals are so nailed down, so specific, that they don't allow room for any out-of-the-box thinking," Melville comments. "You can tell me what you want done, or specifically how you want it done. The first option leaves room for innovation and creative solutions and can expose the company to a wider array of potential benefits. Ideally, you want to put together an RFP that does both, spelling out exactly what objectives you want to achieve, but encouraging the third party to use some creativity and perhaps bring some new ideas to the table.

A Meeting Of The Minds

Once the RFPs have been collected and analyzed, possibly after some further back and forth to clarify points on either side, the potential client should ideally be ready to narrow its choices down to the two strongest contenders, says Cook.

"At this point it's time to really start to work diligently with the finalists, in terms of face-to-face meetings.

"I don't care how well structured an RFP is and how much information the third party sends back. You just don't get the same kind of content and substance through written presentations as you can gather through face-to-face meetings, where there's an opportunity for real dialog back and forth, in terms of questions and answers," Cook emphasizes.

This is the opportunity, Cook and others stress, to experience first-hand each other's corporate cultures, to make sure there's a good fit between organizations."

"It's really important also to get to know the individuals who will be directly involved in your account and the team members that will be involved in running the operation, to make sure it's a proper fit," Byrne adds.

Such meetings and visits to each other's facilities can help the 3PL better understand the potential customer's needs, he points out, by giving them a fuller understanding of the client's business.

At this phase in the process, it's also desirable to bring together in some fashion the various counterparts at each organization, down through the hierarchies and in the specific departments, who will be working together if the partnership is formed, whether face to face or through other means.

Because it's cost-prohibitive to fly a whole team around, Smith notes, he generally visits short-list candidates himself, then sets up and facilitates conference calls between the appropriate staff members at the 3PLs and members of the United Sugars organization, such as customer service, inventory, transportation, warehouse and information systems, so together they can all discuss any questions or issues.

Another aspect of the late-stage qualification process should be a discussion of start-up planning.

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