In today’s highly competitive world, businesses in Perth and around the world are increasing their use of outsourcing. Outsourcing can assist businesses by allowing them to focus on their core competencies, providing more flexibility and reduce costs. Contract Logistics or warehousing is one of the main functions that is outsourced to 3PL providers with 73% of global shippers outsourcing their warehousing according to the 2014 18th Annual Third-Party Logistics (3PL) Study. Continue reading to learn 5 tips when outsourcing to a 3PL provider in Perth.
Be open with information and proactively raise potential issues early
In order for a 3PL provider in Perth to understand your business requirements, it will need very specific data and detailed process information up front. Some of the questions will include the number of SKUs, the average/assumed number of orders per week/day, how many SKUs per order, the number of inventory turns per year, how replenishment works, and the list goes on and on and on. , the better the 3PL provider can Be open and share information, challenges and ideas so it can develop the most appropriate solutions. Further, it is important to proactively raise any issues early. You have experience with your products and customers and know details and intricacies that will assist the 3PL provider. By sharing information openly, the 3PL provider can gain a full understanding of your requirements and develop a proposal that works for both you and the 3PL provider.
Confirm the 3PL provider in Perth uses a Warehouse Management System (WMS) that works for your business
A WMS allows monitoring, managing and optimising workflows and the storage of goods within your warehouse. Systems with radio frequency (RF) are capable of providing even faster data which is important when you are working to deliver on a customer service promise. The WMS system should integrate seamlessly with your internal IT system so you can easily access accurate data, 24/7.
Communicate, communicate, communicateStarting a new business relationship with a 3PL provider is similar in many ways to dating. You meet for the first time, share some information, get along (or don’t) and decide if you want to share more information. This point ties back into the first point about sharing information. By not communicating core elements or aspects of your warehousing operation on a regular basis, small misunderstandings can become big issues, which can lead to major problems. More communication will be required during the planning and implementation phase, but it is important to keep regular communication going. Recurring performance review meetings should take place for the duration of the entire contract. This leads right into the next tip.
Operate with key performance indicators (KPIs) to ensure continuous improvementBusinesses that outsource are looking for continuous improvement. In order to improve a process it must be measured and KPIs are measures that are used to define and track progress toward a specific goal. KPIs should be developed by the customer and the 3PL provider together in order to define meaningful target performance levels. These should be discussed and determined early in the relationship in order to include within the Service Level Agreement (SLA). By defining KPIs that are meaningful and setting these upfront, both the 3PL provider and the customer can have confidence that continuous improvement will be achieved.
Choose a 3PL provider that can add value as you growWhether you are launching your business in Perth, or if you have been providing products in WA for years, it is better to build a relationship with a 3PL provider that can add value to your supply chain now and as your business grows. For many companies, it is ideal to choose a 3PL provider in Perth that not only has experience in your vertical, but offers complimentary 3PL services such as added value warehousing services, freight forwarding, customs brokerage and domestic transport. Specific experience within your vertical and a wider service offering means the 3PL provider is flexible and able to adapt to the expansion of your business in the future.
When you are looking for a 3PL provider in Perth, there are many things to consider. The information we provided here should give you some basic ideas to consider when searching.