Editor's Note: Take a look at our featured best practice, 4 Stage Model Supply Chain Assessment (Excel workbook). The purpose of the 4 Stage Model is to provide a high-level qualitative assessment of an organizations practices and processes. The model aligns with the Supply Chain Council's SCOR model and is broken down into Plan, Source, Make and Deliver. Within each of these major processes are a series of [read more]
Meeting a 3PL Provider for the First Time? Be Prepared
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Forming a relationship or partnership with a Third Party Logistics (3PL) company is an important decision. When visiting the 3PL’s facilities for the first time, it is important to come prepared. Be prepared to ask the right questions, cover the right topics, and achieve the right objectives. You are interviewing the company to see if they can fulfill your company’s immediate and long term needs.
This article presents an agenda for a visit to any 3PL provider. In this case example, the agenda has been customized for a frozen food service company.
<Date of Meeting>
- Quest to be partners working in collaboration and trust
- Are you a public or private company? Asset or non-asset 3PL or both?
- Re-Distribution Discussion: Our suppliers to the 3PL facility TL, (Consolidation/pooling with other 3PL customers) for storage in a freezer/reefer warehouse/mixer, out to our customers TL (Consolidation/pooling with other 3Pl customers) and “last mile” program, exceeding our customer expectations
- Discuss our customer control and “Last Mile” of going beyond customer expectations and driver deliveries; “dock high” or no dock (Lift Gate Service)
- Food Discussion: Temperatures, Safety, Damage (RMA procedure), Spoilage, Dunnage, Pooling/Consolidation, Temp Tags, GPS, Deliveries to our customers
- LTL/TL Discussion: quote review/Quarterly Business Plan (QBR) review time; goal: use TL to gain best freight rates by pooling and consolidation with 3PLs other customers
- Do you have a mission statement?
- Can we review your Table of Organization (TO) chart, if available? Who do we call for all activities? Who will be our main contact, point person? Our contact person?
- Kindly walk us through some critical processes: e.g. incoming order processing, receiving, cross-docking, dock-to-stock, damage/quality checks, inventory records accuracy, warehouse inventory level/turns management, warehouse/picking, quality checks, etc.
- Meet the people who do the actual warehouse work on the 3PL floor
- Customer Satisfaction Measurements/Customer Service to our customers: going beyond their expectations: your drivers and our customer relationships? VOC (Voice of the customer) feedback mechanism.
- Invoice/Billing methodology: One invoice per month?
- Reports you use/we may require
- IT discussion: your IT person (name) : MWS options and Integration , TMS, YMS and integration with us; reports needed: Optimization QBR/cost reduction sharing
- OSHA (Occupational Safety and Health Association) management
- Continuous Improvement Methodology: Lean, 5S, Gemba, Six Sigma, Cycle Counting process, Cost Reduction focus, Slotting/Re-slotting, Kaizen Blitz, Value Analysis, Using your expertise, WMS/TMS Optimization; do you use YMS (Yard Management Systems) and Optimization of Freight
- Export Tracking System/Logistics/Freight Forwarder/Customs/discussion: shipment timeframes, documentation/management
- Carrier Management: TL/TL TMS Optimization
- Top Management availability should critical problems arise, (names; contact numbers) our counter point person here/on the East Coast?
- SLA/KPI/Escape clause, change process, modification clause and cancellation clause discussion
- Contract negotiation: who/how/when?
- Your financial stability
- Food Industry Experience/ Food Customers References?
- Ask for the 3PL’s Value Proposition
A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you. Learn about Value Proposition definition, within the context of business model innovation here.
- Tell us why we should choose you as our 3PL partner?
- What are additional issues you’d like to discuss, other than these topics?
Good luck with your initial meeting!
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Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities. It also captures the management of the flow of goods and services.
In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become. By April, many countries experienced declines of over 40% in domestic and international trade.
COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM. In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective. In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart. Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.
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About Charles IntrieriCharles Intrieri is subject matter expert on Cost Reduction, Supply Chain, and 3rd Party Logistics. He is also an author on Flevy (view his documents materials). Managing his own consultancy for the past 25 years, Charles has helped dozens of clients achieve leaner and more efficient operations. You can connect with him here on LinkedIn or email him directly (email@example.com). Charles also has a presentation Why Lean Fails in a Company? available for free download here.
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