Companies that utilize third party fulfillment (3PL) services sometimes reach a point where they consider transitioning from the 3PL services to internal warehousing and order fulfillment. Some of what drives these decisions is to control costs, whereas others have had a bad experience with 3PLs and now only trust themselves with their product. Using a 3PL isn’t for every company.
Read More >Reviewing contracts for third party logistic (3PL) providers can be a daunting task – especially for those not familiar with the process. One of the most critical aspects in any 3PL contract is the language surrounding pricing and rate increases. It is vital to ensure that the language is fair for both the customer, as well as the 3PL.
Read More >In assisting multichannel companies with deciding on whether to use third party warehousing, third party logistics (3PL) or contact center solutions, we have found that many companies have been able to grow their businesses profitably by outsourcing. Our blog post, 10 Ways Companies Can Profit from Ecommerce Fulfillment Services, shows how many of our clients use third party warehousing advantageously.
Read More >Getting the most from your third party logistics (3PL) provider this peak season starts with your forecasting accuracy. In order for you to get the most from 3PL solutions, you need to have established measurable service levels that are agreed to by both parties as part of your agreement. Establishing these service levels, and having the 3PL vendor meet them requires that you supply realistic forecasts for calls and order volumes by day, by week a month in advance so that the vendor can plan staffing accordingly.
Read More >Problems:
- You’re a start-up company with limited financial resources; or a company where fulfillment is not a core competency, but you have the need to upgrade your infrastructure (website, order management system, call center and or fulfillment operations) means an increase in expenses or requires new capital.
- You have seasonal spikes that run 10:1 or higher (peak vs. average sales week) and wish you could service these peaks in another way.
- You’re trying to build your business, and know fulfillment and customer service are critical to getting and growing sales—but fulfillment is not your core competency.
- Internal fulfillment costs continue to increase, impacting the bottom line.
In all of these situations,third party logistics might be the answer.
Read More >As companies grow and expand, ecommerce fulfillment services is an option that more of our clients are evaluating. This is a case study of how one client made its decision to implement and ecommerce fulfillment solution rather than manage their own operation. It is a small apparel company with 125,000 orders with 50%+ ecommerce orders. Product offering is 24,000 active SKUs and 75,000 calls annually. They needed to replace an outdated, ineffective, non-PCI/DSS compliant order management system, and they had no space for expansion. “People were sitting on top of each other” and the company had a huge assortment of core product to offer.
I fully understand and mostly agree that many multichannel companies want to control and provide internal fulfillment to their customers. However, I am increasingly impressed with the way companies are objectively evaluating how to use third party logistics (3PL) vendors to serve their fulfillment needs.
Getting the best service from your third party logistics (3PL) provider this holiday season starts with your volume forecasting accuracy. You need to have established measurable service levels that are agreed to by both parties, as part of your contract. Establishing these service levels and having the 3PL vendor meet them requires that you supply realistic volume forecasts for the call center (orders, calls, emails, mail, etc.) and the warehouse (orders, receipts, returns, etc.) by day and by week a month in advance so that the 3PL vendor can plan their labor accordingly.
Many multichannel merchants focus on how they can lower operating costs of their supply chain logistics when they consider outsourcing certain tasks. When you use third party fulfillment partners to outsource your operations, you also outsource the investment. Sounds obvious, but the magnitude isn't always clear until you're faced with replacing an order management system, moving into a new fulfillment space or upgrading your website and platform.
Read More >More and more companies today are using third party logistics providers to avoid making investments in that non-core area, or in technology necessary for it. We’ve also seen hundreds of start up eCommerce companies that simply don’t want to be in the fulfillment business. All of these companies are turning to third party logistics providers. With so much riding on it, it is very important that as a third party logistics provider, your order management system (call center, customer service, and marketing) and warehouse management system (warehousing, order management, and fulfillment) and technology give you a continuing competitive advantage. The systems you select will have significant ramifications for your personnel’s productivity, as well as how effectively you serve your customers and help them grow their businesses—and the management information these systems provide can help you grow your business. No matter what type of system you’re considering, the purchase is a long-term investment. In short, selecting the right order management system and warehouse management system for your third party logistics business is a major undertaking.
COMMENTS
SUBSCRIBE VIA EMAIL
Articles by Topic
- 3PL (3)
- 3rd Party Logistics (13)
- Assessing Warehouse Operations (28)
- Automation (1)
- Benchmarking & Metrics (15)
- Business Planning (7)
- Inventory Management (41)
- Order Management/ERP Systems (85)
- Systems Selection & Implementation (13)
- Transportation & Shipping (13)
- Warehouse & Supply Chain Strategies (42)
- Warehouse Costs, Labor and Productivity (16)
- Warehouse Layout, Design & Efficiency (20)
- Warehouse Management Systems (27)
