Blog Posts How to Get the Most from Your 3PL RFP

How to Get the Most from Your 3PL RFP

Have you ever conducted a search for a third-party provider and been disappointed by a slew of responses that come up short or were entirely off the mark? A poorly constructed request for proposal (RFP) could be to blame.

Before you start your next search for a 3PL, give careful thought to how you frame up your RFP. Wondering how to develop a more effective document? Read on.

10 Tips to Improve Responses to Your RFPs

When preparing an RFP, start with the end game in mind. What does success look like? Having a clear picture of the desired outcome can help you narrow your focus and identify the criteria you will use to select a winning bidder.

Think about which features mean the most in your decision-making process. Be sure to distinguish between “needs” and “wants.” Which features are critical and which would be nice to have? Lowest cost? Fastest delivery? A combination of the two?

When you’ve completed your reflection, it’s time to start crafting your RFP document. Here are 10 tips to get you started:

1. Organize the document. Develop an opening statement to introduce bidders to your company and explain what you’re looking for. Then, identify all areas that are important in your selection process so that the bidder can give you an accurate quote. Consider including the following:

  1. Operating assumptions
  2. Volume data
  3. Timeline (including a due date for the RFP)
  4. Product/item specification
  5. Real estate component (warehousing)

2. Provide specifics. Instead of broad, open-ended questions, identify the exact requirements and parameters of the job and ask bidders if and how they can deliver. Providing more detailed information will also help them to present the most accurate pricing possible. Be specific on how you want to see the costs presented. It’s also important to be clear on the timeline. Consider asking for an implementation project plan.

3. Clarify product deliverable specifications. Define how your product will be delivered to the warehouse. For example, will it arrive via domestic dry vans on pallets or ocean containers on the floor?

4. Specify the real estate needs. What geographic location will allow you to reach your customer base as quickly as possible? Is proximity to your manufacturing location most desirable, or is being closer to your customer base more important? If you’re unsure, request the bidder to provide a recommendation.

5. Request dedicated or shared space. Do you need an entire distribution facility devoted to your products, or would you prefer a shared-space environment where the 3PL manages the needs of multiple clients? Explain how much seasonal flexibility you will need for space and labor. Remember to allow room for potential growth as well.

6. Explain storage component needs. Specify how your product will need to be stored. For example, will you need racking or bulk space? A custom engineered solution may be required for your product fulfillment needs.

7. Identify technology requirements. It is critical to define technology needs up front. Do you maintain proprietary software that is specific to your product, or will you require an integrated warehouse management system (WMS) or order management system (OMS) solution from your 3PL?

8. Define operational variances. There’s always an exception to the rule. Share information regarding seasonality, one-off’s, value-added service needs, or any other items that are outside of normal day-to-day operations.

9. Define outbound transactions. How will your customers receive their product? Will you be shipping to a customer DC, retail location or direct to consumer? What type of transportation service do you typically use – parcel, LTL or truckload?

10. Establish expectations for continuous improvement. How will your 3PL continue to improve their processes to drive savings? It is important that they spell out the techniques and processes they have in place to lean their operation as your company grows.

Taking the time to thoroughly map out your RFP can help to save time, better manage costs, ensure service excellence and locate a reliable partner. Best of all, you’ll eliminate the need to search for a new 3PL for years to come!