Reducing Risks in Selecting Your Next 3PL or Logistics Vendor

Reducing Risks in Selecting Your Next 3PL or Logistics Vendor – Qualifying the On-boarding process

One of the largest risks associated with changing fulfillment or e-commerce logistics providers is associated with the transition itself.  There are proven strategies to mitigate these risks and the following will identify our on-boarding strategies.

Timing plays a factor.  Some changes are immediate and beyond the control of both the customer and the vendor. These include changes required due to vendor bankruptcy as an example.  Other changes can have a much more controlled timeline.  The strategy below works for both ends of the timing spectrum and are instrumental for the “crash” launch.

Our experience show that the risks of on-boarding are minimized when the customer and strategic vendor have strong interdependent teams working closely and formally throughout the launch process.

First we establish our team.  It always includes the lead sales representative; head of sales and marketing; operational leaders including warehouse/fulfillment; transportation management; Customer Service, both the department leader and the account representative; MIS; and Finance.  These are the critical areas that need to be aligned to the customer and within the 3PL organization for a strong launch.  Choosing the right leader to hold the team accountable is a critical part of the team’s mandate.

Next we establish meeting frequency.  In an orderly transition where time is not a critical constraint then we find that the meeting rhythms change over time.  At time (t) – 3 months meetings will be typically once a week or even less frequent.  As job 1 approaches the meeting frequency increases to twice per week and then typically daily for the week or so prior to the launch. Depending on the degree of complexity of the account, meetings on a daily basis may continue for one or more weeks and then winding down to weekly, bi-weekly etc as the teams become more comfortable with the stability of the implementation.

We find that the use of a matrix to track the responsibilities, due dates etc form a critical part of the launch / risk reduction process.  (Click here for Matrix) Many launches are similar in nature, especially those of like categories such as e-commerce fulfillment or last-mile delivery etc so over time parts of the matrix become standard which further improves launch performance. A sample of our latest launch matrix is available below.  Feel free to use it and modify it as you wish.

The true magic of the process comes from the combining of the above elements.  A solid cross-functional and interdependent team of customer and vendor that is properly resourced to do the job, the right leader, a matrix to track the schedule and responsibilities, and a meeting rhythm that aligns the team, is in our experience the best way to reduce the risks associated with a transition of vendors or the launch of a new program.

If you have any further questions feel free to contact the writer directly at coled@asldistribution.com