10 critical questions to ask when researching supply-chain service providers, 3PLs

Posted by Harriet Mills on Mar 13, 2015 10:43:24 AM
Creativity at workAn efficient and highly functional supply chain involves various steps along the way to getting a product from raw form to the final point of sale. Many aspects of the supply chain will benefit from working with external companies, such as a materials supplier or a freight management company that ships across the nation. When conducting supply-chain research to find the ideal 3PL to drive your supply chain to the next level, it's important to be thorough.
The right 3PL will provide innovative services that save time and money; the wrong ones, however, can crush your productivity and halt your revenue stream. Be sure to ask these 10 questions any time you're considering a new supply-chain service company.
1. Is the company financially stable? The supply-chain services landscape can change in an instant, so you should always research whether a potential partner is financially secure before making a decision. For 3PL companies, check their D&B rating and the size of bond they carry.
2. Is this a quality partnership available at the right price? Resist the urge to look only at the price and focus instead on the best quality service at the right price. Prices too good to be true can mean an inferior service that will ultimately cost more.
3. Does the company belong to any industry associations? For example, quality freight brokers will belong to reputable industry organizations like the Transportation Intermediaries Association (TIA), National Association of Small Trucking Companies (NASTC), or their local Chamber of Commerce.
4. Has the company received any awards? Another key indicator of a quality partner is that they have been honored with awards and accolades. This information is usually displayed on the company website, often in the "news" or "about us" sections.
5. What is the company's reputation? Ask others in the industry about their experience with a potential partner. Additionally, don't hesitate to ask the company for customer references, and be sure to contact them.
6. How will you monitor performance and cost? Watch the work of your suppliers and implement key performance indicators to reveal any weaknesses so you can fix them proactively.
7. What type of software and technology does the company use? Knowing that a company is using the latest technology ensures it has up-to-date insight into communication processes and real-time transparency.
8. Who will be your main contact and how will you receive communication? Knowing who is managing your account to ensure a quality outcome is important. Who is your main contact, is he/she available 24/7, and who is this person's backup?
9. How are disruptions in the supply chain process handled? Manufacturing machines break and weather delays shipping; there is much that is beyond your control. How does the company handle disruptions to services and communicate updates to partners?
10. How does the company process paperwork? Missing or untimely paperwork can create a huge clog in the productivity pipeline. How does the company streamline paperwork and accounting processes?

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