Thinking About Outsourcing to a 3PL? Here’s what you need to know.

August 6th, 2016 by admin in Blog, Fulfillment Comments Off on Thinking About Outsourcing to a 3PL? Here’s what you need to know.

If you are, then you are not alone.  Approximately 20% of shippers now outsource fulfillment and order processing services to better meet their customer’s needs and to get processing at a low cost.

With a 3PL on your supply chain team, you will become more efficient in how you respond to your customers.  Working with a 3PL ensures best practices in fulfillment services and more delivery options.  3PL’s use proven, streamlined systems for the picking, packing and delivery of items to customers.

But how does it work exactly? Here are the key steps involved in 3PL fulfillment services:

1. Choose a Reputable Partner

Find an established 3PL that shares your values and can deliver the service levels you promise to your customers.  Many printers and courier companies offer these services but be wary, they often lack the knowledge of a seasoned 3PL or force you to use only one carrier for deliveries.  As part of your research, ask about their systems and processes.  They should have a proven warehouse management system (WMS) in place that provides accurate inventory control and offers efficient order processing.  If you are planning on growth or have an Ecommerce platform, ensure that the WMS can easily integrate into your system. Try to gauge how quickly the 3PL can adapt to your businesses changing needs, can they ramp up if your 200 orders per week quickly evolves into 600?

2. Setup Systems

Once you have chosen your 3PL, you will need to work to get your customer information and inventory information set-up.  For smaller, more informal arrangements, this can be done through an import process or even via manual data entry.  For integration with your corporate website or Ecommerce site, your IT people will need to work together. Ensure that the 3PL you choose has flexible options as a well integrated approach adds value to every order shipped and increases customer satisfaction.

Two women collaborating to discuss 3PL options.

3. Establish Work Flow

You can sit back and relax at this stage!  All 3PL’s should have a dedicated representative in place who quickly becomes familiar with your items and who will work with a knowledgeable in-house production team.  This will ensure accurate and cost effective picking, packing and delivery of your items.

4. The First Order – Picking, Packing & Shipping

When the first order comes in through the WMS, the order is verified and sent to the floor.  Trained warehouse personnel will pick your items, pack them securely and ship them to arrive based on your wants or the customers needs.  Once order volume gets established, your team will have enough background data to make crucial decisions about handling and shipping.  A good provider should recommend different packaging options, will move fast moving stock to a closer area and will host a wide range of delivery options with reputable carriers.  3PL’s have the benefit of combined buying power, consolidating shipping for multiple companies through rate contracts ensures that every customer gets deep shipping discounts.  The power of many!

5. Reporting

You should have full access to reports on your stock and its movement.  Ongoing visibility of orders, stock levels and stock movement is a crucial component for managing your business.  Your 3PL will have options available to you that fit your business needs and will regularly audit their processes to ensure the information they provide through reporting is accurate.

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