New Articles

The 4 Pillars of a Successful 3PL Partnership

Shipping 3pl

The 4 Pillars of a Successful 3PL Partnership

Managing a supply chain is a full-time job. Without consistent oversight, your supply chain process could easily end up with excessive levels of inventory, delays in shipping or transportation, and all sorts of inefficiencies. In today’s convenience-obsessed economy, companies cannot afford to let supply chain issues go unnoticed or unresolved.

That’s why I believe an increasing number of business leaders are choosing to outsource logistics to a third-party logistics provider (3PL). 3PLs offer an array of essential supply chain management services, such as warehousing, transportation, order fulfillment, and inventory management. Think about it: did you decide to start your business so you could spend your days chasing down deliveries, both incoming and outgoing? Outsourcing logistics enables you to focus on the tasks you truly enjoy, like building a distinctive brand identity, growing your operation, and better understanding your customers’ needs.

Now that outsourcing logistics has become more commonplace, more 3PLs are popping up left and right. This can make it difficult to find the right partner for your business.

Track record and reputation 

One of the most important factors to consider when choosing a 3PL is your potential partner’s reputation. This isn’t one of those situations when there are advantages to partnering with a younger business with fewer customers. When it comes to a responsibility as crucial as logistics, it’s imperative to choose a 3PL that has a strong track record and can produce good references from numerous satisfied customers. 

You also want to find a 3PL who has experience working with companies in your industry. Every industry has its own challenges and regulations, and a 3PL that has worked with other companies like yours will be familiar with these challenges and regulations and know exactly how to navigate them. 

To that end, a 3PL with more experience is also more likely to have a larger network of partners. In the likely event of a supply chain disruption, a 3PL with more partners to count on can keep your supply chain running until the issue is resolved. In fact, you can get an even better idea of a 3PL’s reputation by reviewing references from vendors, carriers, and employees, not just customers.

Customization and flexibility 

Again, every industry has its own specific characteristics, and you want to partner with a 3PL that understands what makes your industry distinct. And due to the notorious complexity of supply chains, it’s important that 3PLs consistently adapt their services to meet the needs of each individual customer. A good 3PL will possess the resources to accommodate specific challenges of your business, such as unforeseen spikes in demand, or the need to maintain a certain level of inventory for a certain item throughout the year.

With this in mind, it’s also important to consider how your needs will change as seasons progress. Will there be times when you require additional services that you don’t need at this particular moment? Will the extent of your needs for each service change significantly? For example, at certain times of year, you may eventually require more storage space, or you may need to ship your items to further geographical distances. Your new logistics partner must be able to quickly scale up and meet these needs at any given time.

Finances and technology

Lots of 3PLs might say they are well-positioned for the future. Only some, however, will be able to prove it. When speaking with potential partners, be sure to determine whether the 3PL is in good financial shape and has made the necessary investments to succeed in the logistics industry of 2023. For example, if the 3PL has been able to consistently add new customers, has it simultaneously been making key investments in infrastructure and staff?

Another way to tell if a 3PL is ready for the future is the prevalence of advanced technology in its services. Does the 3PL consistently harness the latest transportation management systems, warehouse management systems, and freight forwarding software to improve efficiency and profitability for its customers? To what extent has the 3PL automated its fulfillment processes? A good 3PL should be able to rattle off all sorts of different ways it has stayed up to date with the latest developments in this ever-changing industry.

Customer service protocols

A reputable 3PL will have many customers, but that shouldn’t stop them from giving the same amount of attention to every single one. This is only possible if each customer has a designated point of contact who is fully prepared to field questions or concerns at any given time. 

As you’re well-aware, supply chains tend to become disrupted at the most inconvenient moments, and every minute that goes by could cause more orders to be delayed. For this reason, your new partner should have someone who will always be available to respond to communications and work with you to resolve sudden issues.

As you’re speaking with potential partners, ask them how they typically handle supply chain disruptions, and how you would contact them for support. A 3PL that understands the importance of customer service will have protocols in place for resolving different types of issues such as delivery errors or product recalls. It’s the 3PL’s job to help you maximize efficiency and profitability, so the last thing they should do is put you in a situation where you’re wasting time and money.

Final thoughts

Choosing the right 3PL comes down to determining whether a potential partner possesses the resources to simplify your business’s logistics-related challenges while also meeting the changing standards of the logistics industry. Once those boxes are checked, it’s just about getting the impression that the 3PL is ready to treat this new partnership as a top priority and can truly help you succeed.

 

ROI 3PL distribution chargers made4net “largely making compromises between the way a warehouse wants to work and the way the system allows the warehouse to work,” logistics gather business

What Small Business Owners Need to Know Before Choosing a Warehouse Management Software

Many small business owners think they can manage inventory, shipping, and order fulfillment just fine with spreadsheets – until suddenly, they’re faced with too much demand and not enough organization. 

This can happen when you get your first wholesale order, or if you suddenly experience an uptick in customer inquiries about order statuses and shipping updates. Where once a simple Excel sheet did the job, you find you’re overwhelmed and struggling to fulfill orders on time or keep up with customer questions.

Warehouse management software can help small companies grow as painlessly as possible by automating inventory tracking, streamlining order processing, and integrating with shipping carriers to provide real-time updates. The right warehouse management software (WMS) can make or break a small business, so choosing the right one is a big decision. Choose the wrong system, and you have incorrect inventory levels, incorrect shipments, or delays in packing orders. Selecting the right WMS can save you time, money, and a lot of headaches down the road.

Why does WMS matter?

You may think that picking the right WMS is critical for every business, and you’d be right. But it’s especially important for a small business owner. The reason is high customer expectations. Your customers will expect Amazon-level service and reliability from you, even though you don’t have Amazon’s resources. Regardless of the size of the business they’re dealing with, over 60 percent of consumers expect free shipping on their orders, and they expect orders to arrive within three days. That’s quite a lot to live up to. 

There’s also the matter of your reputation. Enormous companies like Amazon or Walmart can get away with the odd negative review or experiences due to the sheer volume of transactions. But for a small business, it only takes one or two negative reviews before it starts seriously affecting your revenue. 

Finally, the necessity of picking the right WMS also comes down to your margins. Small business owners need a WMS that is going to save time and money down the line. A well-suited WMS can streamline warehouse operations, automating key processes such as inventory management, order fulfillment, and shipping. By reducing manual tasks and optimizing workflows, business owners can significantly save time and improve operational efficiency. Time saved translates into increased productivity and the ability to handle higher order volumes – without the need for additional labor costs.

What to factor into your decision

This should go without saying, but don’t get swayed by the latest and greatest WMS system just because everyone is talking about it. You want something that has features that work for your business. For example, imagine your business specializes in ecommerce and dropshipping. You should look for a WMS that offers simple integration with popular ecommerce platforms like Shopify or WooCommerce. This will let you automate order imports, and inventory synchronization, and get real-time tracking updates.

Conversely, your hypothetical ecommerce business probably doesn’t need advanced automation features like robotic picking or conveyor systems. Those would be more suitable for large-scale operations with high order volumes and extensive inventory management needs. 

You may also want to look for advanced reporting and analytics with demand forecasting, integration with your existing accounting or ERP systems, and seamless integration with popular shipping carriers such as UPS, FedEx, or DHL.

Your WMS also needs to provide you with room to grow. You may be a small business now, but hopefully that won’t always be true. You want to invest in a WMS that works for your business today while having the capacity to scale up with you. 

For example, look into whether the WMS can handle increased order volumes, warehouse locations, and product lines without sacrificing performance or racking up significant additional costs. This will save you the hassle and expense of having to switch to a new system as your business grows. Alternatively, if you’re not planning on expanding your small business, you can find more cost-effective systems, like a basic WMS package with limited features.

You also need to look at ease of use. Small business owners typically don’t have time to learn new, complex systems. That’s why user-friendliness is a great factor to take into consideration. Do you want something as close to plug-and-play as possible? Do you want a WMS that comes with a ton of user support? When you investigate potential options, check out how easy the analytics dashboards are to interpret, or how intuitive you find the user interface. Ultimately, you want a WMS that will seamlessly slide into your business with a minimum of fuss. 

Lastly, it’s crucial to look at affordability. While cost should not be the only determining factor, you do need to look for a WMS that sits inside your budget and provides a solid return on investment.

WMS options are typically one of two pricing models: perpetual licensing and monthly subscription models. Your choice will significantly affect both your initial and annual budgets. Perpetual licensing models are more expensive upfront since you’re effectively buying the software outright. Entry-level WMS options for this pricing model typically cost around $2,500 per warehouse. 

Recurring service costs are typically significantly lower. You pay month-by-month and many providers include some support and upgrade options in the monthly price. The subscription model uses cloud infrastructure for data storage and processing, offering flexibility and scalability.

Aside from pricing models, you should also calculate any potential additional charges for installation, customization, or support. Balance the costs against the potential benefits and efficiency gains the WMS can bring to your operations. 

For example, imagine you choose a subscription-based WMS that costs $100 per month per user plus a $1,000 installation cost. If you have five users, that means one year of your WMS will cost at least $7,000. Your WMS should ideally result in over $7,000 of additional sales that year, or recouped employee time. 

When gauging the cost-effectiveness of your WMS options, don’t be shy about asking for multiple demos, getting at least three quotes, and asking what services are included in the cost. These vendors will be more than happy to make sure they’re the right fit for your business.

Choosing the right WMS

The process of selecting the best WMS for your business is an important one. The right WMS will help you keep up with customer expectations, manage your reputation, and even grow your business later on. The wrong WMS could be an expensive waste of time that results in frustration and loss of revenue.

By keeping business fit, scalability, user-friendliness, and cost in mind, you should be able to figure out which WMS is right for your business.

Author Bio

Carl has led Smart Warehousing since 2001 and spent his entire career in the logisticswarehousing, and fulfillment space, from working the warehouse floor to CEO and founder. He is a logistics management and operations veteran, actively leading the business to its next phase of growth