Outsourcing to Third Party Logistics Companies & Increase Your Ability To Focus

third party logistics outsourcingYou might worry about outsourcing your company’s entire supply chain—not enough control, too many unknowns, not worth the risk, to select third party logistics companies.

But you can focus 100 percent of your attention on your core business functions and still keep a close connection with your supply chain through outsourcing logistics to one or several third party logistics companies, who can then collaborate and co-source with you, to create a custom-tailored system designed to provide the logistics and supply chain services your company needs.

Successful supply chain and logistics management is a series of structured and established tactical maneuvers. A great deal of operational savvy is involved in forecasting inventory; managing the picking, packing, and shipping functions required to distribute a finished product; shipping a replacement part; or processing a return from a retail store or consumer.

Niche Third Party Logistics Companies to Manage the Entire Supply Chain

The decision to keep these functions in-house or contract with one or many third-party logistics companies is entirely strategic and can dramatically impact any organization’s bottom line. In fact, according to consulting firm Armstrong & Associates 86% of Domestic Fortune 500 companies use 3PLs for logistics and supply chain functions.  Consumer packaged goods giant Procter & Gamble Co. doesn’t have to be sold on the benefits of using a third-party logistics companies; P&G uses 53 of them. Nestlé (42), Unilever (36) and PepsiCo (35) are also prolific buyers of services from third party logistics companies. The same can be said for automotive OEMS (GM uses 51 3PLs, Volkswagen 42, Ford 41), industrial conglomerates (Philips uses 32, Siemens 30, General Electric 29) and high-tech companies (Hewlett-Packard, to cite but one example, uses 39).

Types of Third Party Logistics Companies

So, how do you know which third party logistics companies or company you should hire for your needs? Use the following checklist below, from third party logistics consultant, Chuck Intrieri, to make the best decision. In fact, if you would like to consult with him to help you choose the best one, feel free to email him by clicking on this hyperlink. Once you see the areas where you need the most help, you can start your search for the best provider(s).

Third Party Logistics Companies Checklist for Choosing and Qualifying a 3PL

Location for Warehousing

Equipment

third party logistics companies peopleStaffing

I.T. systems issues

Flexibility

Communication

Qualifications

Expectations of performance

Compliance

Pricing

Finding a true partner

Bottom line: Do you feel you have found third party logistics companies that will truly partner with you? Do they have the right chemistry? Can you trust and collaborate with the chosen 3PL or 3PLs? Choosing the right outsourced third party logistics companies is a serious and large operational change. It is vital to take your time when vetting and choosing the right 3PL for your company’s needs. How many 3PLs does your company use?

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