In order to focus more closely on essential functions like product development and customer service, many businesses are turning over their logistics and fulfillment operations to third party providers.
A strong third party logistics (3PL) partner can help you reduce costs, improve your supply chain performance, build your brand and increase your bottom line. A weak 3PL partner can set you back or even endanger your business’ survival.
It can, however, often be difficult to recognize that you've chosen the wrong partner until things start going horribly wrong. But there are certain early indicators that could help you avoid holding on to a relationship with a provider that doesn't value your business.
If you notice the following signals, your third party logistics provider may be cutting corners:
- You’re not getting enough personal attention. Sure, a successful provider will have a lot of customers, and you may not be their biggest account. But there should always be a contact assigned to manage your account. This person must be available to you, able to clearly answer questions and propose solutions to any problems. You shouldn't be waiting days to get an update on your project.
- Reporting is slow or incomplete. If your provider is not proactively reporting their stats and ROI, something is amiss. Your vendor should be self-motivated to show you how they're contributing to your business success. It’s in their best interest to show you that information which would help build a stronger relationship with you, and it's not a good indicator of success if they're withholding data. You should have visibility of your entire supply chain at all times. If your vendor is not transparent and not taking initiative to provide frequent updates and reports, they are either inexperienced and disorganized or negligent. “No news” is never good news.
- The 3PL is poorly integrated (or not integrated at all) with your technology. Your systems should be able to seamlessly and consistently communicate with the provider’s—and initial setup should be quick. If you aren't seeing that connectivity, your 3PL may be postponing crucial tech investments or skimping on IT staff that are needed to properly support integration. And that is just a waste of your time
- You're offered cut-rate pricing. If your third party logistics vendor's pricing seems too good to be true, it probably is. The provider should be able to explain their pricing structure, clearly explaining how they will perform for you. Inexplicably low cost may indicate that they cutting major corners to (poorly) service your company and your clients.
- Your 3PL cannot accommodate special needs. If you’re planning a special promotional mailing or sampling and your vendor can’t flex to meet a different box size or shipping speed, they may be running too lean.
- Your fulfillment provider is not hitting KPIs. All of your most important performance indicators should improve once you sign up with a 3PL. If they don't, it's not really a worthwhile investment. If you have additional KPIs that align with s particular business goal, like sustainability or warehouse/in-transit damage-- your provider must take those seriously as well. You should be notified of any major issues and the steps being taken to avoid future problems. If they’re not providing stellar service, they may be cutting corners on staffing or other crucial business components.
- No innovation is occurring. Your provider should analyze your supply chain and come up with increased efficiencies. They should take initiative to streamline business processes to enhance performance, rather than falling behind expectations. If the company management and staff are not motivated to improve, they're not taking their business future (or yours) seriously.
If you've signed onto a lackluster partnership and want to find out what an innovative, dedicated and experienced third party logistics provider can do for your business, contact Aero Fulfillment Services.