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What are the most effective ways to improve 3PL performance?

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If you work in manufacturing, you know how important it is to have a reliable and efficient third-party logistics (3PL) provider. 3PLs handle the transportation, warehousing, and distribution of your products, and they can make or break your customer satisfaction and profitability. But how can you ensure that your 3PL is performing at its best and delivering value to your business? Here are some effective ways to improve 3PL performance and optimize your supply chain.

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1 Set clear and realistic goals

One of the first steps to improve 3PL performance is to define your expectations and objectives. What are the key performance indicators (KPIs) that you want to measure and monitor? How do you want to communicate and collaborate with your 3PL? What are the service level agreements (SLAs) that you want to achieve and enforce? By setting clear and realistic goals, you can align your 3PL with your business strategy and create a shared vision of success.

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Joe Bui

Enterprise software and automation expert
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I will add…Don’t leave any chance for miscommunications. Make sure all the stakeholders are present. This must be shared with not only the sales team, but the 3PL’s operations team and their leadership. Ask for examples of how your KPIs are measured to make sure it is in line with how you measure it. They should easily be able to provide this information with much effort. If they ask for time to create it, it’s a red flag. It means that your KPIs are not something they do not regularly track. You want a 3PL that matches your requirements as much as possible without having to change their processes.

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2 Establish regular feedback and reporting

Another way to improve 3PL performance is to establish regular feedback and reporting mechanisms. You should have a system for collecting, analyzing, and sharing data on your 3PL's performance, such as on-time delivery, inventory accuracy, cost efficiency, and customer satisfaction. You should also have a process for providing constructive feedback and suggestions for improvement, as well as recognizing and rewarding good performance. By establishing regular feedback and reporting, you can identify and address issues, track progress, and foster a culture of continuous improvement.

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3 Leverage technology and innovation

A third way to improve 3PL performance is to leverage technology and innovation. Technology can help you streamline and automate your 3PL operations, such as by using cloud-based platforms, artificial intelligence, blockchain, or internet of things. Technology can also help you enhance your visibility and control over your 3PL processes, such as by using real-time tracking, dashboarding, or alerts. Innovation can help you find new ways to optimize your 3PL performance, such as by implementing lean, agile, or green practices. By leveraging technology and innovation, you can increase your 3PL efficiency, accuracy, and sustainability.

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4 Build trust and partnership

A fourth way to improve 3PL performance is to build trust and partnership. Trust is the foundation of any successful relationship, and it is especially important when you outsource your logistics functions to a third party. You should trust your 3PL to handle your products with care, to deliver them on time and in good condition, and to comply with your standards and regulations. You should also treat your 3PL as a strategic partner, not just a vendor, and involve them in your planning and decision-making. By building trust and partnership, you can foster loyalty, collaboration, and innovation.

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5 Evaluate and benchmark

A fifth way to improve 3PL performance is to evaluate and benchmark. Evaluation is the process of assessing your 3PL's performance against your goals and expectations, and identifying strengths and weaknesses. Benchmarking is the process of comparing your 3PL's performance with industry best practices and standards, and identifying gaps and opportunities. By evaluating and benchmarking, you can measure your 3PL's value, quality, and competitiveness, and find ways to improve and excel.

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6 Learn and adapt

A sixth and final way to improve 3PL performance is to learn and adapt. Learning is the process of gaining insights and knowledge from your 3PL's performance, feedback, and data. Adapting is the process of applying those insights and knowledge to your 3PL operations, and making changes and adjustments as needed. By learning and adapting, you can keep up with the changing market conditions, customer demands, and industry trends, and ensure that your 3PL is always performing at its best.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Sudhir Mahale

Career Coach specializing in problem solving for working professionals
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The third party logistics company is an independent company with their systems. They will be your key partners to assist your business and should be treated as partners. We should first carry out industry analysis and select top 2 or 3 for further evaluation to sync with our business. We can then review each of them for final screening. Their capabilities for responding in crisis situations should be most important. At the same time we need to understand and respond to their expectations. Maybe we need to make changes in our own systems. Pricing can be key parameters and having open book costing is ideal. There has be bonding between key operating personnel. No matter what software we use, it’s is operated by we humans:

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What are the most effective ways to improve 3PL performance?

1

2

3

4

5

6

7

1 Set clear and realistic goals

2 Establish regular feedback and reporting

3 Leverage technology and innovation

4 Build trust and partnership

5 Evaluate and benchmark

6 Learn and adapt

7 Here’s what else to consider

Manufacturing

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What are the most effective ways to improve 3PL performance?

1

2

3

4

5

6

7

1 Set clear and realistic goals

2 Establish regular feedback and reporting

3 Leverage technology and innovation

4 Build trust and partnership

5 Evaluate and benchmark

6 Learn and adapt

7 Here’s what else to consider

Manufacturing

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