Today’s business environment for brands and manufacturers is full of opportunity and complexity. The pressure for growth is leading many to explore a range of avenues including new channels, geographies, and product innovations. From a supply chain perspective, these avenues can run the spectrum from disrupting their entire mode of operations to just adding a new capability. To support these efforts, supply chain pros often look to 3PLs as a potential solution. The path to exploring and identifying the right 3PL sometimes ends up with identifying a set of multiple 3PLs, each bringing a different specialty to support business demands.
Maintaining a roster of 3PLs is not uncommon but it’s also not entirely desirable as it can add more complexity. This complexity can manifest itself in numerous ways: managing the coordination among the different 3PLs, understanding and executing different protocols for communication and operations, and integrating and managing different data sets and systems.
There is a better alternative. Top-tier 3PLs can provide a more comprehensive offering to meet the demands of your business today with a scalable solution that can grow with you into the future. Some aspects to look for include:
- Warehouse network and transportation capabilities. Consumers and B2B customers expect quick and accurate deliveries. Having warehouses where your customers are is a primary way this goal can be met. Additionally, consideration should also be given to the 3PL’s transportation capabilities and partners they work with. Having established relationships and size with partners provides greater assurance of timely product delivery. Warehouse network and transportation capabilities are also key enablers for business growth. Accounting for current and future demand is essential in this assessment.
- B2B and DTC shipping. One of the core issues many businesses are facing is the transition to e-commerce and direct-to-consumer (DTC) business models. Most B2B businesses aren’t set up to shift from shipping truckloads to eaches or ready to add on the capability to do both effectively . Having the capability to meet the delivery needs of both customer sets provides the most flexibility to support your paths to growth.
- Product handling versatility. New product innovation is at the heart of how brands and manufacturers grow. Many products have special handling requirements including big and bulky, liquid, hazardous material, aerosol, and more. 3PLs with expertise across a range of special handling scenarios provide a better fit for current product mix and future product innovations.
- History of success. There is a flood of new technologies coming into the supply chain space to increase the effectiveness and efficiency of this function. But, even with all the latest technology, overnight success as a 3PL is hard to come by. Successful 3PLs have an established track record of logistics support, a roster of experienced supply chain professionals, and proven processes that have been business-tested for many years.
- Value-added services. All businesses are unique and require some customization in how they support their customers. A 3PL should offer a range of value-added services to support the type of experience you want to provide your customers. Some of these services can include kitting, bundling, and reverse logistics.
Checking the boxes across these capabilities can streamline the number of 3PLs you work with, hopefully down to one, as well as offer a range of secondary benefits. A top tier 3PL will take the time to fully understand your business prior to offering solutions or pricing, saving you time and money down the road.
- Cost savings. 3PLs with this level of offering have been in business a while and operate at a large scale. As a result, they likely have highly honed processes along with leverage among their partners that lead to greater efficiencies in their operations.
- Improved customer experience. Accurate and timely product fulfillment is central to the customer experience today. If you have been falling short on that dimension, an effective 3PL partner can get you back on track and improve customer retention.
- Supply chain resilience. The supply chain disruption faced over the past few years is still very top of mind and has forced a rethinking of the best operating models to fortify against it. A 3PL with sufficient scale and capability can be a good way to do this and insulate your operations from future disruption.
Simplify your logistics outsourcing
If you are considering a 3PL or thinking of switching, this criterion should provide a helpful framework to guide your evaluations and lead you to a more complete solution. For further reading and to assist in that process, check out this helpful case study on a consumer goods manufacturer that partnered with Essendant, an expert 3PL, to grow their business 2X, expand into DTC, and lay the groundwork to enable future expansion plans.
