Supply chain optimization can be difficult. It can be simple to optimize the aspects of operations that are the easiest to observe and measure, instead of larger processes that can make more of a difference. Even though there are a variety of tools that can help you fix inefficiencies in your workflows and processes and provide you with performance analytics, the problem is that these are just very specific aspects of your logistics process—so you aren’t optimizing your overall supply chain. An example of this would be if you have a great tool that can help you with carrier selection in real time, but you don’t have the ability to accurately forecast demand, the optimization of carrier selection doesn’t help you at all. You truly need to be able to look at the whole picture of your operations to effectively optimize your entire supply chain.
Process optimization can be even more difficult when you outsource some or all of your fulfillment process to a third party provider. While this is often a great choice for most businesses, it can make it more difficult when you may have limited visibility into your day-to-day logistics operation. Luckily, there are ways to optimize your 3PL that will improve your fulfillment process as well as your relationship with your provider.
Supply chain optimization with a 3PL provider
If you’re using a third-party logistics provider, they likely have expertise and industry knowledge that allows them to implement best practices for your type of business. However, you still want to make sure that their processes are uniquely designed to work with your specific needs—there’s always room for personalization! Logistics can easily and quickly get very technical and complex, but as long as you invest in building a strong relationship with your 3PL, you’ll be able to work together to build a successful supply chain for your business. Here are a few ways you can optimize your 3PL and your relationship with them.
What is your end game? Be very clear and define every detail of your process, unique requirements and ultimately what your goals are with your 3PL. Remember, your success is their success—so the more open and transparent you can be in your communication with them, the more efficiently they can help you achieve your goals.
Know what your key performance indicators (KPIs) are and understand reporting structures
Of course it’s very important to know which metrics you will use to measure success and effectiveness, but you need to work closely with your 3PL to help them understand what metrics and analytics they need to provide you with. These metrics should show you where the data comes from and offer you a benchmark to measure against. Be sure to collaborate with your 3PL and learn what their processes are and what kind of technological solutions they have that can provide you with actionable data.
Be open to new ideas
Your decision to outsource fulfillment was likely based on the expertise of your 3PL. Now let them use their knowledge and experience to offer new ideas and solutions that will increase your efficiency. They have extensive experience working with a variety of different businesses, as well as unique tools that will help with process improvement, and of course, team members who have years of expertise and have seen it all. A well-rounded and collaborative 3PL provider can help you optimize your supply chain and increase your efficiency more than you might have been able to do on your own.
Identify your customers and unique markets
Every industry segment and product line has its own specific fulfillment and distribution requirements and set of best practices. Make sure you align with a 3PL that has the experience that best fits your business and knows the most efficient and cost effective processes that will help you service your customers at the highest level.
Manage your contracts
Signing contracts is probably the least favorite part of any business relationship, but it’s important to develop contracts that are fair and advantageous to your business and the 3PL. This can set the tone of your relationship with your fulfillment provider moving forward. Additionally, make sure the 3PL truly understands your company goals and has the team and capabilities to help you meet them. Establishing this understanding from the beginning ensures that you will feel comfortable with the policies and procedures your 3PL partner is implementing and will lead to a successful long-term relationship.
Optimizing your relationship with your 3PL can streamline your logistics operations and truly create the best experience for your customers. Learn more about how ITS Logistics can help you meet your goals and grow your business today.