Blog Posts 5 Issues to Examine More Closely When Choosing a 3PL
“A good decision is based on knowledge and not on numbers.” ~ Plato
Selecting a new third-party logistics provider can be a daunting task. Unlike a cup of coffee or new pair of shoes, this buying decision will have a long-term impact on your operations for years to come.
As Plato recognized, a good decision is a well-informed one. To make the best choice of 3PL, give careful consideration to your Request for Proposal (RFP). It’s important to ensure that you fully understand all the measures that you are evaluating and weigh them appropriately.
Is It Time to Reconsider Your RFP Priorities?
Over many years of responding to RFPs at Saddle Creek, we’ve identified five issues that can be common sticking points for prospective customers. While some companies are quick to base their buying decisions on one or more of these variables, such complex topics merit deeper discussion.
Choosing a 3PL based on one of these criteria? Make sure you understand the full picture first.
1. Price. Many companies will seek out the provider offering the lowest price. But more often than not, 3PL’s that offer overly competitive pricing tend to change their tune once they get into the thick of the operation and end up asking for price increases.
In the long run, we find the most successful clients prefer pricing that is transparent, thorough and predictable. When we respond to an RFP at Saddle Creek, we attempt to learn as much as we can about our prospect’s business and engineer pricing that takes into account their specific needs and objectives. We want to avoid an uncomfortable conversation about unexpected costs several months down the road. We generally look at the total cost of the solution – storage, technology, handling, parcel, value-added services, etc. We go out of our way to price our solution in the most holistic format for the client, so it is easy to understand what to expect comprehensively.
2. Timeline. Often, companies are anxious to rush implementation. While we have been known to have an operation up and running in 30 days or less, we encourage clients to reconsider ultra-aggressive timelines. We want time to do things right – testing that data is flowing correctly, fine-tuning order process flows, ensuring that the WMS is working properly, providing comprehensive training, etc. Since we provide custom rather than cookie-cutter solutions, there are many variables to perfect.
3. Project Profile. Occasionally, after RFPs are sent out, project parameters change. For example, a company might experience a dramatic change in order volume or decide to add a temperature control requirement at the last minute. It is important to communicate these alterations to prospective providers as quickly as possible, so they have an accurate understanding of the scope of work. Bottom line, we won’t commit to a project unless we are 100 percent certain that we can execute it flawlessly.
4. Geographic Location. Many companies have a particular location in mind when issuing an RFP. We always try to take a strategic approach to network configuration to ensure the fastest, lowest-cost service available. With 45 conveniently located facilities across the country and our willingness to add new locations to meet client needs, we generally are able to open a facility in any desired location nationwide.
5. Size. When touring our facilities, prospective clients are sometimes amazed by the sheer size of some of our operations and wonder if their project is too small for such a large setting. Truth be told, we work with clients of all sizes in terms of space, transactional volumes and services required. The common denominator? We only pursue business where we are confident that we can add value.
At Saddle Creek, we take great care to ensure that there is a mutual fit when we partner with clients. Our goal is to build a solid foundation for a long-term relationship. We’re always willing to discuss potential concerns and find ways to address them. We want to be a good decision for our clients.