Logistics Minded

Third Party Logistics Providers – what differentiates them?

Retailers are today brought to take into account the complexity related to their supply chain when choosing a new logistics provider: after decades developing a traditional supply chain, they need to trust their 3PLs in handling e-commerce and omni-channel business.

What considerations can be made on the different types of Third Party Logistics?

Third Party Logistics or 3PL business continues to grow around the world and therefore logistics professionals at almost all firms‎ are quite often tasked with selecting the best partner from a growing number of 3PL providers. Over the same time period the use of centralized procurement has also grown dramatically, driven by increasing financial and code of conduct ‎controls, especially in publicly traded organizations.

Procurement definitely delivers on the values mentioned above, when used prudently and for the appropriate commodities and services. However, when it comes to Third Party Logistics, other major considerations play a crucial role, and these are beyond procurement’s typical price and compliance focus.

(…) What are the important factors and differences to look for when selecting and then evaluating retail 3PL providers and how retailers can best identify and measure these key traits in potential 3PL partners:

– Support all business relevant 3PL services

– High systems and & Interface capabilities

– Real continuous improvement

– Wide scope of retail services

– Provide true business value add

(…) Retail is quite complex due to the wide range of required services, including various picking methods, higher sku counts, radical volatility across a wide array of processes. Some of these include crossdock verification, detailed receipt and putaway, store pick/pack/ship, returns as well as many value added services including labeling, hangers, EAS tags, store transfers and seasonal packaway to name a few. And for consumer products manufacturers with growing e-commerce and drop ship requirements, a demonstrated e-commerce fulfillment capability is a must, especially when it comes to high volume e-commerce operations.

Traditional retailers who have developed their supply chain over decades are facing a completely new set of rules to handle ecommerce and omni-channel business: small picks on an item level, individual shipments going to people’s homes, systems and technologies to manage ordering, warehousing, inventory and distribution functions,  adjusted network infrastructure.

(…) In addition to the B2B store distribution and B2C e-commerce fulfillment services described above (…) it’s important to ensure all potential bidders have solid systems in place to support both B2B store distribution as well as B2C e-commerce.

 

 

 

 

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  • Neha Joshi says:

    Laurent, thanks for sharing this post. A logistics client needs to consider many different aspects while hiring a service provider. This article will help new businessmen to find the right logistics provider without much difficulty. Hope to read more posts on warehousing and transportation aspects of logistics.