Outsourcing the logistics function offers numerous potential benefits for many businesses today including significant logistics cost savings, achievement of customer service levels, increased customer satisfaction and improved company reputation. However, evaluating and selecting the right third party logistics provider continues to be a challenging and risky proposition for even the most experienced managers.

OUTSOURCING
TO THIRD PARTY LOGISTICS (3PL) PROVIDERS

3PL Provider Selection

New World Business Solutions’ 3PL market knowledge and objective, fact-based approach generates a detailed understanding of the costs, benefits and risks involved in outsourcing logistics management to a 3PL provider. We examine the warehouse outsourcing pros and cons to identify whether third party warehousing is the right fit for your company.

We take the time to understand your reasons for outsourcing logistics and identify the issues you seek to overcome and the opportunities you seek to gain by using a suitable 3PL provider (e.g. capability, assets, HR, growth, cost, performance).


THIRD PARTY LOGISTICS CONTRACT NEGOTIATION

New World Business Solutions has assisted numerous clients with logistics outsourcing projects. Our support will help ensure a successful 3PL contract negotiation with your 3PL provider to avoid common mistakes organisations make when outsourcing logistics.


We take the time to ensure your expectations of the 3PL provider are clear, documented, specific, realistic and measurable.

3PL PROVIDER
AUDIT

A periodic audit of the relationship with your 3PL provider is a highly effective means of ensuring that the initial intent and promise of the logistics outsourcing arrangement remains on track.

We help you to identify the best timing of the audit in conjunction with your 3PL contract and implementation plan to ensure a realistic timeframe has been allowed. The initial audit also includes a post 3PL implementation review to identify improvements required from both parties. The audit aims to ensure logistics performance targets are achieved as per the 3PL contract.

  • Logistics outsourcing vs in-sourcing
  • Warehouse outsourcing pros and cons
  • Logistics outsourcing strategy and objectives
  • Business functions and processes to be outsourced
  • Current costs, processes and performance gaps
  • Metrics/Key Performance Indicators (KPI’s) to measure performance and establish accountability
  • Evaluation of logistics outsourcing risks
  • Identification whether to expect logistics cost savings
  • Identification whether the 3PL provider can achieve the required customer service levels
  • Identification whether the 3PL provider can increase customer satisfaction and improve your company’s reputation
  • Organisational buy-in from key internal stakeholders
  • Managing transition from in-house to a 3PL managed operation
  • Identification of 3PL providers with advanced logistics capabilities, superior logistics performance and capacity to handle growth
  • Identification of opportunities to free up capital and tied-up assets previously required for in-house logistics
  • Development of a logistics outsourcing strategy and warehousing strategy including a strategy to reduce warehousing labour
  • Select qualified and sustainable 3PL providers
  • Improved and actionable performance measurement and monitoring
  • Identification of the logistics cost savings to expect by contracting the 3PL provider
  • Identification of how customer service levels will be met by the 3PL provider
  • Organisational buy-in from key internal stakeholders regarding the selected 3PL provider
  • Structure 3PL contract to ensure accountability and performance
  • Exit plan if the partnership with the 3PL provider does not meet requirements
  • Service levels and targets to be measured
  • Process used to measure achieved performance as per 3PL contract
  • Minimum and target service levels
  • Actions when agreed service targets are missed
  • Amendments to 3PL contract as business initiatives, products, or service changes
  • Ongoing governance process to protect service, quality and cost
  • Establish well defined process and coordinated plan to ensure successful negotiations with the 3PL provider
  • Increase accountability and focus on performance of the 3PL provider
  • Structure fair and balanced 3PL contracts to hold the 3PL provider accountable for their actions
  • Resolve issues prior to start-up and monitor results that follow
  • Clearly defined responsibilities for managing the 3PL provider and the outsourced logistics function
  • Clearly defined requirements for technology, communication, information sharing and data visibility
  • Organisational alignment with key internal stakeholders
  • Realistic timing of 3PL provider audit
  • Effectiveness of pricing structure to meet the ongoing needs of the business
  • Evaluation of current costs, performance and quality and comparison with industry benchmarks
  • Opportunities for improvement in existing operations
  • Adequacy of services provided by the 3PL provider to meet customer service requirements
  • Amendment of existing commercial and contractual issues with the 3PL provider
  • Identification of improvements required from both parties
  • Ability to measure 3PL provider and industry leading industry practices and pricing benchmarks
  • Alignment of pricing structures with business requirements and volumes
  • Increased operational performance
  • Defined and prioritised issues that are limiting the effectiveness of the partnership with your 3PL provider
  • Established method for measuring continuous improvement
  • Independent and non-biased evaluation of the partnership with your 3PL provider
  • Achievement of expectations e.g. logistics cost savings, customer service levels, customer satisfaction