As your operations grow, outsourcing becomes a necessity for many businesses. Partnering with a third-party logistics provider (3PL) can help meet the increasing demand, but finding the right one isn’t always easy. With a multitude of 3PLs offering various services, it’s crucial to have a clear checklist to identify the best fit for your business. In this blog post, we provide a handy RFP (Request for Proposal) checklist to guide you in selecting the ideal 3PL. You can download the checklist here, or continue reading for a detailed breakdown.
Start by gaining a comprehensive understanding of the 3PL’s background and capabilities. Consider the following factors:
- 3PL locations: Do their locations align with your desired supply chain network?
- Financial viability: Assess their financial stability and security.
- Key references: Research their past clients and determine if their experience matches your business needs.
- Company culture: Evaluate whether their values and culture align with yours.
- Reliable labor pool: Determine their labor turnover and reliance on temporary workers.
If the 3PL satisfies your requirements in this category, you can proceed to the next section.
Types of Shipments
Delve into the specifics of the 3PL’s capabilities regarding shipments. Understand what types of shipments they handle effectively. Consider factors such as:
- Full pallets, full cases, or each picking: Determine if they can handle the specific type of shipments you require.
- Order line execution: Assess their ability to execute a desired number of order lines efficiently.
This section is crucial to evaluate if the 3PL can provide the value-added services that will not only help your business survive but thrive. Utilize the RFP checklist to determine if they offer additional perks such as:
- Temperature control
- Special packaging
- Apparel sorting by style, size, and color
In this era of rapid technological advancements, the right technology can make a significant difference in your operation. Assess the 3PL’s technology offerings by considering the following:
- Advanced Warehouse Management System (WMS): Check if they utilize a modern WMS.
- Automated billing: Determine if they provide automated billing processes.
- Integration methods: Assess their capacity to offer various integration methods.
- Inventory and transaction visibility: Ensure their technology provides advanced visibility.
Key Performance Indicators (KPIs)
An RFP Checklist wouldn’t be complete without KPIs. They guide us, give us milestones to track, and help us, over time, make better decisions for the operation. Now, some operations may have differing KPIs, but there are a handful, especially with regard to 3PL selection, that are universally required.
- Cost: Assess the pricing model (transactional, cost-plus, or special projects).
- Accuracy: Evaluate the reliability of order status and inventory tracking information.
- Speed: Consider the speed of operations from dock-to-stock to order delivery.
- Efficiency: Evaluate the 3PL’s ability to handle labor and resource utilization effectively.
- Space utilization: Assess their efficiency in utilizing warehouse space.
Using this RFP Checklist is an excellent starting point for selecting a suitable 3PL. If a vendor meets all the requirements on the checklist, they are worth considering further. But, if you lack the time or resources to conduct this search, we’re here to help. Reach out today for assistance in evaluating, vetting, and selecting the right 3PL for your operation.