After looking at the different types of 3PLs and deciding which functions fit the company’s logistics needs, the next step is to start researching providers. There are many factors that come into play when choosing a 3PL provider that will fit your needs and they are different for each job, project and company. Choosing the right provider takes some work, but when there is a good fit both with the product and the culture, logistics operations can be handled like a well-oiled machine.
Number of Providers
The first thing you have to look into is the number of providers you will need. Will you be using a single general provider to handle storage, and transportation? Or will a niche warehouse with a separate fleet of trucks to handle all of the distribution be a better fit? This is different for every company. How large is your project, and how will the numbers change over time? Some providers, like Murphy are willing to start an operation in different parts of the nation to serve their quality customers. For example, a few years ago Murphy had a customer that needed more distribution options, so we opened up a warehouse in Kansas City, Misssouri. Now we have two 100,000 sq. foot warehouses in that market!
You also have to look into what type of presence you want your provider to have. What areas are vital to your operation? Do you have a world-wide presence that ships from ports all over the globe, or are you a start-up looking to hit one large city and test the market? Those are the extremes, and most companies will fall somewhere in between. There are always options to change the strategy once a provider is chosen, whether you need to expand or shrink, which is one of the main benefits of moving your logistics operation out to a third party.
The services offered by each different 3PL provider also are very important when choosing a provider. Last post we talked about the Different types of Providers and what they do. Check out that post for a deeper understanding about the differences in providers. There are also a couple of other differences that most providers will have and that is technology offered and value added services. Do you have an ecommerce business that has hundreds of orders per day, you may want to link an EDM set-up to the 3PLs system so that orders are easily found, picked and shipped without multiple people having to go through them. What if you want to handle all of the orders in house, and send a flat file to the warehouse each day detailing what needs to be shipped. This should all be looked at when you are researching different providers, to make sure that the 3PL is capable of performing a specific task. There are also Value Added Services that will vary between providers. At Murphy we are able to take on projects with virtually any technological and value added needs, because of our extremely talented and thorough crew!
Thank you for reading! Be sure to check back next week as we talk about the next steps for choosing the right 3PL provider for your logistics operation. We will talk about some of the final steps in choosing including quotes, culture and getting started!