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.
What we are talking about is providing estimated call volumes by day, by week a month in advance. It is also extremely helpful if you have historical data and know your anticipated increase in calls for this year to be able to provide the calls by hour within the day. Having this information will allow the third party logistics vendor to have the appropriate staffing levels throughout the day. Without this information provided, you won’t be able to hold the 3PL vendor accountable or penalize them for not meeting your service level agreement (SLA) standards; call abandonment rate, call to answer time, etc. If you have not provided call estimates you may be susceptible to higher costs in order to provide your service levels or they simply won’t be able to meet them.
Likewise your vendor will want to know what your order forecasts are by day and by week a month in advance as well. Using your history from last year and taking into consideration any changes in the promotional calendar and your anticipated increase in sales over last year will make your forecasts more accurate. Similar to the call center, the 3PL Operations Manager will need to be able to staff accordingly to meet your volumes, to your agreed upon service level standards for same day order processing guarantee.
Another item that will greatly aid 3PL solutions is to keep them up to date on purchase order (PO) deliveries. Supplying the 3PL provider with advance shipping notices (ASNs) as soon as they are available or if not utilizing ASNs any changes to expected receipt dates, items or quantities on POs.
These PO notifications will allow the third party logistics vendor to staff accordingly to get your product received within your service level standard and minimize any delays in this process. This is crucial to you and the 3PL in order for you to maintain the service levels your customers have come to expect.
These are just a few of the ways to maintain the communication needed with your 3PL company. These topics as well as the review of their performance should be part of your quarterly business review (QBR) process. During your QBR you have the opportunity to discuss changes in your business, new items for the Fall/Holiday season, changes in the promotion schedule and anything else that will affect the 3PL and its ability to provide the performance standards that are set in your SLAs. 3PL Solutions are an extension of your business so constant communication is essential, for all parties to perform at the levels that are expected, in order to provide the best possible service to you and your customers this peak season.