This is our 9th post in our strategic transportation management and logistics series. When selecting a transportation mangement 3PL to aid you in a robust and effective transportation management strategy, defining the rules of engagement is critical to success. Do you even first understand your own needs? We’ve built a deep checklist to understand first before you go about engaging with a 3PL. When you do engage and hire a 3PL for effective transportation management, it is vital that you look at this relationship as a partnership and not a commodity.
For a quick recap, in the series so far we have covered:
- 10 Ways Effective Transportation Management Drives Competitive Advantage
- 6 Strategic and Proactive Tips to Stay Ahead of Distressed Shipments
- Strategic Logistics: 8 Steps to Controlling Inventory Flow & Driving Warehouse Efficiency
- 5 Areas of Technology Application to Aid in Logistics Visibility and Communication for en Route Disruptions
- 6 Benefits of Applying Useable Data in Logistics For Continuous Improvement
- Strategic Logistics Management: The Importance of Flexibility
- Why A Successful Transportation Management Program Is Empowered By Data
- How Effective Logistics and Transportation Management Leads to Scalability in Business Operations
Prior to selecting and throughout your dealings with a transportation management 3PL, you will need to learn a few management and engagement tactics. These tactics enable the relationship between the 3PL and your company to grow and prosper. Unfortunately, failing to maintain this relationship is at the heart of many failures in supply chain processes. To help make keeping this relationship engaged and managed well, take a look at five things you will be responsible for.
1. Set Expectations at the Beginning.
Expectations are the catalyst behind all business decisions. Your expectations for your business as a manufacturer or distributor are to improve production, satisfy your customers, and grow. Similarly, the expectations for a 3PL will mirror and enhance the needs of your supply chain. Yet, expectations can be difficult to explain and manage.
Before selecting a transportation management 3PL, explain your expectations for how the 3PL’s services will improve your business. Define what type of services you want, need, or have considered previously. Explain how your current processes work, and listen to feedback from the 3PL. Furthermore, the 3PL will expect you to be completely honest in your expectations, so do not feel the need to withhold information. In fact, many 3PLS will ask you to sign a non-disclosure agreement (NDA) to keep all parties’ information safe, private, and secure.
2. Communicate Often and With Many Different Representatives.
Often, business owners gravitate towards a particular representative of the transportation management 3PL. This is based on initial interactions between the 3PL and each business. Human nature makes others seek out familiar faces and personalities. However, withholding communication from other people in your 3PL is only a hindrance to your business.
Additionally, some business owners fail to recognize the value in communication. With advanced technologies, dashboards, and KPIs in place, communicating with a 3PL may seem irrelevant. Why would the 3PL want to communicate when you can see all of their information at a glance? The answer lies in continually improving your business processes.
Try to create a communication schedule, which contains specified times for meetings, conference calls, or email notifications, at the onset of selecting your transportation management 3PL. Furthermore, your master service agreement (MSA) should contain the contact information of your primary representative and others in the 3PL who can benefit your business.
3. Constantly Think About Risk.
Risk management is a huge part of an effective transportation management strategy. What happens in the event of a disaster? How would the transportation management 3PL respond to ensure the timely delivery and operation of your outsourced processes?
Your 3PL should be willing to explore all of the potential “what if” scenarios. You should have an intricate understanding of what the 3PL will do to ensure all of your processes are not affected. Some of these scenarios may seem extreme, but you need to think about the overall goal of driving your business forward.
If you feel the 3PL’s plan for addressing a particular issue does not stand up to your company’s vision, say something about it. Each risk mitigation plan can be altered and improved, and your 3PL respects your input into the creation of these plans. However, staying silent will only lead to disappointment and distrust, which undermines the value of hiring a transportation management 3PL in the first place.
4. Enact Change Management and Training.
Your employees work for you. They have spent countless hours training and working to ensure your company survives and grows. However, employees may be unwilling to trust your decision to outsource supply chain processes, such as transportation management, to a 3PL. This is where change management comes into play.
Change management reflects how you influence the change of current processes through your employees. This may include seminars, webinars, conference calls, and training sessions. Every interaction in your business represents another venue for effective change management. If your employees do not embrace the forthcoming changes, managing the relationship between your company and a 3PL will be much more difficult.
If you feel your employees will embrace the change, work to show them how the change will benefit the company. You may be tempted to curse, scream, or yell about certain changes, but your employees will be watching your behavior for how to act. If you experience stressors or feel under pressure from the 3PL, do not give the employees a reason to doubt your rationale. Your transportation management 3PL is meant to make things easier, not harder.
5. Do Not Impose Limitations on Your Selected Services.
In business, it can be tempting to avoid making purchases, entering long-term contracts, and trusting others with your company’s responsibilities. However, going beyond these limitations is crucial to the success of using a 3PL. As a result, your company must be willing to adapt to changes in 3PL structure and processes, which will benefit your business.
Similarly, you must be willing to take a proverbial gamble on your 3PL. Sometimes, the goal may not seem visible, and in some cases, the goal may appear impractical. However, the 3PL’s success depends upon your success. If the 3PL fails to achieve increased production and improvements in your supply chain processes, the 3PL loses money. Therefore, you can safely believe that all decisions will reflect your best interests, even when they do not appear to.
Learning more about how to effectively manage a relationship with a transportation management 3PL marks the beginning of a journey of increasing your supply chain processes. However, this journey is not without risk, and a 3PL is designed to reduce this risk by constantly working with you to increase production. Above all else, think of your 3PL as an extension of your employees. Without your business, a 3PL would not be possible. Without a transportation management 3PL, expanding your business may not be possible. By following these five tips, you can stay engaged and maintain a positive relationship with the 3PL of your choice.