Highly effective 3PLs have developed the right habits, culture and processes to deliver excellent service to their clients. Innovation and new technology are obviously important, but when evaluating a 3PL, go with the one that excels at blocking and tackling.
The 7 Habits of Highly Effective 3PLs
Habit 1 – Excellent Communication
The best 3PLs do a great job of communicating with their clients and logistics partners. Clear, concise communication increases the likelihood that shipments will be moving on time and for the right price. The best 3PLs communicate effectively throughout the entire lifecycle of the customer relationship.
During the sales phase a good 3PL does the following: listens to client needs, manages client expectations, customizes services, and builds relationships.
After the sale, during the onboarding and implementation phase, a top 3PL will do the following: train client personnel, sell stakeholders on the value, share status reports and resolve implementation problems.
During the post Implementation phase, a top notch 3PL will provide communication on the following: shipment management, documentation, rolling out new initiatives, new services and ongoing training.
Habit 2 – Measure Logistics Performance
A highly effective 3PL will use key process indicators (KPIs) to monitor logistics performance. A KPI is an indicator (a metric) that you have chosen, and agreed with your partners and or customers, that will determine whether you are meeting your critical success factors.
Typical logistics KPIs measure the following: cost, on time performance, billing accuracy, damage, process compliance and customer service.
Habit 3 – Process Oriented
The best 3PLs have well defined processes to ensure maximum effectiveness and efficiency. Processes enables cross training. Well defined processes also means another employee can step in when an employee is absent or leaves the company. Process is the first step in continuous improvement. The processes should be shared with the internal team, logistics partners and clients. Software drives process compliance.
Habit 4 – The Right People
Great 3PLs hire, train and retain great people. Retiring baby boomers has caused a talent shortage in both logistics and supply chain fields. Filling this gap is legions of recent college grads. While the recent college grads have the raw talent, they lack experience and knowledge. Look for companies with hands on management and lots of training.
As logistics outsourcing has grown, many companies filled job openings with commission only salesmen and franchises. These non-traditional team members often come from other industries and work far from headquarters. These types of working arrangements are less than ideal and require exceptional communication from both the company and remote team member.
Habit 5 –Strategic
There are two types of shippers – strategic and transactional. The best 3PLs only work with strategic shippers who are willing to build a long term relationship with the right companies. Highly effective 3PLs develop and provide customized solutions for their clients. In order to customize a solution, 3PLs need to really understand the needs of their clients. This type of customization requires an investment in time and money, which means the 3PL needs to have a commitment from the shipper.
Many 3PLs work with transactional shippers because the profit margin is higher. The best 3PLs provide strategic and comprehensive solutions that address all aspects of shipping.
Habit 6 – Continuous Improvement
The best 3PLs never stop learning and improving. They are always looking for ways to add more value for their clients, which requires a deep understanding of their clients. Highly effective 3PLs provide services that are constantly evolving to take advantages of new technologies and new ways of doing business. They stay abreast of industry changes, threats and opportunities. The best 3PLs are also great teachers. They educate their clients on new trends, technologies, opportunities and challenges.
Habit 7 – The Right Culture
Each 3PL has it’s own unique culture that can be a great benefit to or a big detriment to performance. Look for 3PLs that have the following cultural traits: integrity, ownership of problems, proactive, responsive, flexible, people oriented