So, you’ve determined it’s best for your company to outsource its warehousing, distribution, and other logistics so company resources can be totally focused on core activities. Okay, now what?
You need a way to compare third-party logistics (3PL) providers that is comprehensive, yet doesn’t take up a lot of your time.
Here is an easy process that gets you the information you need to make your decision in a fast and easy manner.
How to Select a 3PL Company
To make the selection process as effective and efficient as possible for your business, here is a streamlined process consisting of five steps.
Step 1: Create a request for quotation (RFQ)
This document should include all the logistics services you are seeking to outsource. Be sure to give complete and detailed requirements, specifications, scope of work, etc.
Step 2: Identify 3PLs to Receive Your RFQ
Companies that provide warehousing, distribution, and other services differ in the extent of their offerings, the manner in which they operate, their use of the latest technology, their prices, and the number of warehouse facilities.
In addition to including 3PL providers that are located in the same area as your business, also consider those that may be in the same region, or closest to your company’s target market areas. Think to the future as well and look at things like scalability, flexibility, and global capabilities.
Step 3: Review Proposals from 3PL Companies
As proposals come in, it’s helpful to create a spreadsheet to enter key information for comparison purposes.
The spreadsheet should include columns listing your requirements, criteria and prices, along with the responses from each third-party logistics providers.
This document serves as a decision-making tool and is also beneficial to share with other departments or management.
Step 4: Narrowing Down the 3PL Contenders
It’s not uncommon to receive proposals from warehousing and distribution companies that are similar in services and comparatively priced. Depending on how many 3PLs were on your RFQ list, the goal is to narrow down the choices to the top five, three, or two companies.
Some ways to differentiate between your top choices are:
- Soliciting feedback from other departments involved in some way in your company’s supply chain process.
- Asking each of your top 3PL vendor choices to make a presentation to the management team.
- Scheduling site visits to your top 3PL choices. These will allow you to view their operations, the technology they have in place and how well it will integrate into your company’s, the processes they use, their capacity, and the competencies of their staff.
With all these actions, keep in mind that you’re trying to determine which logistics provider is the right organizational fit for your company.
Step 5: Make the Final Decision
Conduct follow-up phone discussions with each 3PL provider to further evaluate how they would handle situations that may develop with your business, or outside influencers, for instance, rising gas prices, carrier work stoppage, etc.
Ask each logistics company in the final running for references and be sure to contact each reference on the list. Also consider gathering independent references, such as market standing and reputation, accomplishments, industry involvement, online reviews, etc.
Evaluate the information, do a final comparison, and choose the 3PL vendor that best meets your company’s needs.
We Welcome Your Business
Brendamour Warehousing, Distribution & Services welcomes the opportunity to respond to your RFQ and to answer any further inquiries you may have.
We’re always pleased to host on-site visits so you can see our warehouse facilities in action and discuss how our logistics solutions and services can address your company’s needs and bring added value.
Feel free to contact us at any time to discuss your requirements. We look forward to serving your warehousing, distribution and other logistics needs.