If your company wants to partner with a third-party logistics provider for transportation management, you’ll need to start preparing a bid to the 3PL marketplace.
Three standard elements need to be observed: service, price and data management.
Many companies make the mistake of only considering price while neglecting cultural intangibles such as how well your team is embraced and how much it is involved in the outsourcing plan.
The old adage is true – you get what you pay for, and the lowest price doesn’t always equate to the lowest overall cost.
Choosing a winning company based solely on the bottom line can result in miscommunication, a poor business relationship, and lack of follow-through when unforeseen shipping problems occur.
That being said, once you analyze the market competitiveness of your candidates, quickly narrow them down to a “short-list” to evaluate in detail. Shift your focus from math to “match."Here’s the checklist you need to make a great partnership happen:
1. Move beyond the sales team that’s trying to sell you the business – ask the senior management how they manage their business today. Ask how they satisfy their clients’ needs in the market.
2. Review the org. charts and ask about their escalation process when a problem is encountered.
3. Plan an on-site visit to meet the people that will be managing your business.
4. Ask for a list of client referrals and be committed to calling them. Ask how the client chose that provider and, more importantly, why they are still with them today.
5. Ask to see the implementation process on how the 3PL will manage change within your organization during the start-up process.
While cheaper rates may help your bottom line, the initial partnership experience will drive the momentum of success or failure as you begin to re-engineer your transportation around an outsourced partnership.
Once you have solid math and a good match, move ahead with a multi-year commitment that allows the 3PL enough time to change the process necessary to maximize their value and protect your interests