8 Features to Look for In An e-Fulfilment 3PL
With the accelerated growth in e-commerce, many organisations are focusing on how to respond to the demands of the ever-changing market, and choosing to outsource their supply chain and logistics activities to the experts: e-fulfilment 3PL’s.
Every sector, every organisation, and every customer is unique, and there is no “one-size-fits-all” solution in such an increasingly competitive world.
While there are numerous 3PL’s, large and small, offering e-fulfilment services, it is critical for organisations to analyse their needs and choose the best-fit 3PL for their needs.
We have selected 8 features that every organisation should consider when assessing 3PLs, to ensure they can achieve a “best-fit” scenario:
- Range of Services
To truly remove the distraction of managing the many complex logistics activities, your 3PL should offer a full range of relevant services, such as quick-response consumer delivery (including COD, installation, etc), warehouse storage and picking at a “piece” level, returns, international freight, and depending on the size of your business, perhaps even multiple regional DC’s, procurement support, and regulatory compliance support.
3PL’s that can manage the full range of services can also usually generate synergies along the supply chain that will reduce your costs and lead times, while facilitating a higher degree of supply chain visibility.
- Resources and Demonstrated Capability
Prior to engaging any 3PL, always go and “see with your eyes” that they have the resources and activities that have been agreed upon, and they are of the quality and capacity that will satisfy you. Avoid 3PL’s who make large promises but are unable to demonstrate the same. It is better to deal with several small 3PL’s who have mastered their local areas than to deal with one 3PL who is spread too thinly across multiple geographies.
Remember that the most lasting experience that your customer will have is how the final delivery is handled.
- Supply Chain Visibility
Real-Time Visibility of orders and inventory along the supply chain is a fundamental function. Not only do your customers expect to see the status and location of their orders at all times, but such visibility along the supply chain is vital to your organisation optimising its demand planning, fulfilment service levels and inventory minimisation.
- Clear and Transparent Costs
Professional 3PL’s provide a detailed schedule of their rates during the quotation stage, and ideally should be able to provide you with a detailed map reflecting their understanding of your supply chain activities, and the costs that you should expect to pay along the way. They should be able to not only tell you what the costs will be, but also how they will carry out each of the activities and what lead-times you should expect.
Steer clear of 3PL’s that are vague when it comes to their quotation or drafting of the contract, and be clear with them that there should be no hidden fees other than what has been specifically quoted.
A final note on costs: be wary of “too good to be true” cheap quotes. I have consistently found in my experience that “cheap is never actually cheap in the end”.
- Flexibility and Scalability
3PL’s operating in the e-fulfilment sector understand the need for flexibility in volumes and services when it comes to their customers. The e-commerce sector has, and continues to experience small start-ups, volatile growth and swiftly evolving diversity of services and channels.
- Customer Service
From the 3PL’s perspective, there are two customers to serve: Your Organisation as their direct customer, and Your Customers as well.
Consumers expect a seamless and error-free delivery, tailored directly to their convenience. This demands the highest levels of customer service, awareness and proactive behaviour. Technology that supports location address finding, live tracking, accurate load and route planning are the minimums.
- System Integration
3PL’s will generally be using a WMS and TMS as a minimum, with many also employing CRM’s and Control Tower platforms. The 3PL’s various systems should all be fully integrated within their own ecosystem, and must also be fully integrated (not just interfaced) with your website, order management and inventory systems.
- Reporting and KPI’s
Information is the blood of the organisation. 3PL’s should be providing digital reporting of all inventory, transaction, financial and order flows: such as inventory levels, order status, movement volumes and times. It is also critical to have an ongoing KPI/Performance “Dashboard” available at all times to monitor the most critical services, such as “On-Time” delivery, “Order Fulfilment” levels, etc
Depending on the nature of your organisation, there may be other important features or differing priorities. In addition to the above points, I also recommend that each organisation critically assesses its own competitive strategy and core organisational goals to ensure there is alignment and the best “strategic fit”.
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