Yes, there are more than 5 ways to optimize your 3PL relationship, but these are right up there as most important. The more I thought about writing this article, the more I thought 3PL optimization has a lot in common with marriage! Don’t believe me? Take a look.
How Your 3PL Relationship Is Like Marriage
1. Ensure That It’s the Right Fit.
We all know what happens when a couple gets married and they are much more dissimilar than alike – it ends in divorce. And that’s what will happen with your 3PL relationship if you don’t ensure that the relationship works for both parties and both are compatible regarding shared goals and interests.
Too many times, outsourcers get into these relationships based only on pricing or promises. The 3PL wants more business and may promise you the world. You need to be fully vested, honest, and open with each other before signing an agreement. Sure, requirements can change, but try to discuss what could happen beforehand and share as much about plans and strategic direction as you can. That’s the best way for the relationship to start and continue to flourish long-term.
2. Stay Connected.
After the honeymoon is over, it’s what happens from then on that matters. Don’t drift apart like partners in a bad marriage. Your 3PL is your partner and vice versa. You need to help them be successful for the relationship to prosper, which means not taking advantage of them if something in either of your businesses changes.
Part of staying connected is measuring performance but not just on-time deliveries, turnaround time, or other “standard” measures.
- Did your 3PL help you with an emergency delivery or pick up?
- Did they bring you an unexpected cost-saving or process improvement?
- Are there other important areas that they’ve helped you with?
Make sure you recognize them for these services when you evaluate and communicate overall performance.
3. Be Flexible.
Sure, your legal advisor drew up a favorable contract for you. But “set in stone” is not always advantageous for either party. I’ve seen 3PL’s close their doors unexpectedly in part because they either promised too much and couldn’t deliver, or the outsourcer wouldn’t budge on contract terms that ultimately led to them going out of business.
Just like in your personal relationships, you probably don’t get your way every time. And when situations change in your logistics program, you should remain flexible enough for the sake of the relationship to change with them.
4. Look For and Establish Continuous Improvement Methods.
It’s not too much to ask for continuous improvement plans from your 3PL relationship. Here are some things you can ask for them to deliver on:
- Shared cost savings
- Best practice initiation and implementation
- Route optimization
- Trailer utilization
- Lean practices
There are more, but these are some of the most significant. Ask your 3PL to bring them to you as they are in many ways the eyes and ears of what’s happening in logistics.
5. Keep What You Do Best In-House.
This one really made me think of personal relationships. Growing up, my family and I would occasionally eat out at a restaurant. My mother cooked Italian food like nobody’s business, though, and I can still smell the meatballs frying in the pan before their luxurious hot bath in her tomato sauce! So we rarely went to an Italian restaurant because Mom’s cooking was so good — that was her core competency (among others).
Similarly, your company has core competencies – so don’t outsource them just because you can. Make strategic decisions based on your needs and the strengths of your 3PL partner.
BONUS: Hold Regular “Formal” Meetings With Your 3PL Supplier.
Meeting for lunch or dinner with your 3PL is pleasant, and you may even talk about business, but you should also hold formal Strategic Business Review (SBR) meetings with them regularly. SBR’s (also called QBR’s for quarterly business reviews) are an essential part of managing your 3PL providers.
Here are just a few keys to include in your SBR:
- Invite the family. Anyone who has a vested interest in your program from both sides, which means executives, managers, schedulers, drivers, assistants, or anyone that has a part in how the program works.
- Past performance. Things like sales, production volume, on-time pick up and delivery, and quality.
- Strategic direction. New locations, new products, new routes, marketing events.
- Risk and loss. Hopefully, you measure risk and discuss ways to eliminate risk.
With these basics of good relationship management and optimization, your 3PL marriage is sure to remain optimized for the long haul.
CWI Logistics Is Your Optimal 3PL Partner
Since 1966, we have been one of the leading logistics companies in Florida and the southeast US. Today, we’ve got 11 strategic locations, and we provide the best turnkey 3PL solutions in the southeast. At CWI Logistics, we are experts in warehousing and can offer you many storage options and moving your freight. We’ve operated in climate-controlled warehousing for over 50 years, so we are extremely knowledgeable and able to customize your warehousing solutions based on your needs. Call us today to discuss all of your freight storage and logistics needs. We’re here to help – from dock to dock and door to door.