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Know About the Best Practices for Selecting and Managing a 3PL

3PLs of today are different from those of your grandfather’s 3PLs. Originally, third-party logistics meant transportation and warehousing, but now it seems to cover everything. As the scope of the discipline expanded from physical distribution (the 1960s and 1970s) to supply chain management (the 1980s and 1990s), third-party logistics companies followed. Selecting a 3PL that suits your business needs is crucial for success. What if you get to know selecting a third-party logistics in Las Vegas is not that difficult. Sounds interesting right? In this blog, you will get to know about the best practices for selecting a 3PL. So keep on reading the blog till the end. Let’s start:

Practices for Selecting a Third-Party Logistics in Las Vegas

Choosing the right 3PL is crucial to a successful relationship. Invest time in two critical tasks if you want to find the right 3PL for your needs:

  • Analyzing internal processes, and

  • Establishing a rigorous and relevant selection process

  • Start With an Internal Assessment

In many cases, executives regretted not doing a thorough needs assessment before hiring a 3PL, because it resulted in significant costs and missed opportunities. In order to begin this process, you should review the 3PL activities we listed above, and decide which ones you need now or will need in the future. Do you need kitting, for instance? What about IT services? Do you need last-mile delivery? As a next step, document the current situation and your vision for the future. Examine the forces affecting the market, such as capacity (e.g. over-the-road domestic capacity limitations but continued overcapacity of ocean freight) and new disruptive technologies, which we'll discuss later. Then consider your 3PL partner based on your goals in areas such as cost, service, and new business expansion.

  • Next, Plan the 3PL Selection Process

Make sure your selection process is clearly defined. A third of firms hire consultants to help with the selection process. They may be lacking in resources or have not conducted an RFP process in a long time. While consulting can result in a streamlined, disciplined process, it can also create communication problems between senior members of the firm and prospective 3PLs. Be sure your operations are well-documented. It is necessary to provide information about product type, packaging, palletizing, throughput, product handling, and dimensions, as well as anything else that affects labor content. Pay-me-now-pay-me-later is the situation here. The cost of an operation will likely rise if the data isn't cleaned up beforehand. Despite that, our research confirms that many bids contain false, inaccurate data.

Therefore, these are the best practices for selecting third-party logistics in Las Vegas. Now let’s explore the practices to manage the 3PLs.

Practices for Managing a Third-Party Logistics in Las Vegas

Once you have selected your 3PL partner, you need to manage it in a collaborative manner that enables both parties to achieve their respective goals. We identified the following list of best practices as part of our Vested Outsourcing analysis (see Appendix A) through interviews with our corporate partners and 3PLs. Managing your 3PL effectively requires focusing on three key areas:

  • Contracting- By following good contracting practices, the 3PL contract will be fair and balanced for both the shipper and 3PL. When creating a 3PL contract, you should consider several contracting considerations like contract negotiation, contract length, payment schedule, etc.

  • Performance Measurement and Management- Performance management involves both measuring performances (which metrics you will use) and managing it (how you will scorecard and measure the effectiveness of suppliers). It is ideal for identifying the appropriate metrics to be a joint effort between the 3PL and a discussion of what success looks like.

  • Governance (managing the ongoing 3PL relationship)- A 3PL relationship must be managed properly. As a result of good governance, a shipper and their 3PL can manage their day-to-day operations and continuous improvement activities with consistency, flexibility, and transparency, which enables them to work jointly effectively.

Therefore, this is how you can effectively select and manage third-party logistics in Las Vegas. Moreover, this blog must have helped you to know how to select and manage a 3PL. So are you looking for the best 3PL in Las Vegas? We at PowerHouse LV- the leading public warehousing company have got you covered. We are here to provide the best logistics solutions within your budget. So what are you waiting for? Get in touch!

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