10 Helpful Hints
- Be Strategic:
Look at selecting a company as you would in making any major long-term purchase. Just don't look at your current needs but look at the "big picture" as well as into the "future". Be thorough in your evaluation.
- Look for Flexibility and Customization Capabilities:
Can the logistics provider be flexible to meet your changing needs? Can they customize an approach to you and your customer's specific requirements? In today's highly competitive global environment, "flexibility and customization", become critical business differentiators that can separate your organization from the competition.
- Look for IT System Capabilities:
Make sure you get the kind of systems capability you need to support your company's product, inventory requirements, customer service expectations, and information needs. Leverage the technology resources that the logistics provider can bring to your business without you having to add IT capital and associated labor expenses.
- Conduct a Thorough Location Analysis:
Prepare a list of what you and your customers' needs are (current and future). Then find a warehouse that best suits and matches those needs. Try to locate the facility as close as possible to the end-customer in order to minimize constantly rising transportation expenses and to enable quicker response times to your customers.
- Look for Room to Expand:
Although you may currently require a limited work scope in one location, consider carefully future expansion plans in your selection — just don't focus on current needs. A 3PL that can manage the entire supply chain, provide IT logistics infrastructure, offer warehouse facility growth, and enables other value-add services... will be worth its weight in gold over time. It is very expensive and disruptive to be changing a logistics provider, particularly in time of growth and as additional work scope needs occur.
- Evaluate Warehouse and 3PL Networks:
Many companies have reaped excellent results from taking advantage of end-to-end supply chain management services. If you are planning to expand your supply chain to outside the U.S, a provider with a global network is a wise choice.
- No Warehouse Is an Island:
The importance of easy port access can not be denied in today's business environment. If you are evaluating facilities in land locked areas, be sure to look closely at the access and costs associated with other means of "in and out" transportation. Poor access to cost effective transport many times are the reason behind lower prices.
- Make a Site Visit:
Be sure to examine the warehouse or distribution center for facility cleanliness, condition of premises/equipment, professionalism of its people, and the relationship between employees and management. Meet with warehouse executives as a well run organization starts at the top. Also talk about other important considerations like: safety, security, handling processes, customer service culture, etc.
- Lowest Price Is Not Always the Best Choice:
Lowest unit price may not always produce the lowest net cost or greatest return to your organization. Since the logistics provider is an extension of your company, they will directly impact your performance, operating costs, customers' satisfaction, and future sales.
- Check References:
Talk with independent sources that do not have a vested interest in your selection, particularly interviewing their customers. A call to the Better Business Bureau is also good check. Independent opinions and reality checks are invaluable tools.
