How to Choose a 3PL Provider for Warehouse Management?

If a business owner chooses to outsource the inventory management services, the success of the project depends on the choice of the right partner. This is because the stakes of the warehouse management project are pretty high. Apart from the impact on the other functions like the markets and manufacturing, the 3PL service provider is in charge of the inventory also. This means that your money is in the hand of someone else. Thus, the right question has to be asked when you look for a 3PL provider for warehouse management. The answer to the questions will give you an insight into the different factors that need to be considered.

Multi-National or Local Service Provider

The choice between local 3PL and multi-national service provider is the dilemma often faced by the SCM managers. However, you should know that dealing with multi-national companies has its own advantages. This because the MNC services have integrated logistics services which offer you value addition along with seamless service and that too, within a low price. Thus, it makes sense to go with multi-national companies as they provide services across the globe. Moreover, they also offer standardized processes across different locations.

However, on the contrary, these companies might not have the same focus on management and competence in every location. Also, some companies might have been conventional transportation providers and have acquired competence in warehousing but are not focused service providers.

Local service providers will have a better idea about the laws of the land and will also know how different things work out. As a matter of fact, they will have local expertise and ability to manage the resources and operations in a better manner. Since they are a small and local player, you can expect them to focus better.

The choice might be difficult and should be based on the size of the project, the policy of the company, and the total number of locations.

Evaluating the Capability

Evaluating the top 3PL companies mean understanding the capability that they hold in respect to operational capabilities, management culture, as well as technical competence. The evaluation includes a detailed response document from the 3PL service provider. Thereafter, it is followed by a presentation from the 3PL provider and subsequent visit to the location.

Commitment and Involvement of the Service Provider

BD and marketing teams are the face of the market from third-party logistics side. Since the contract logistics is operation and capital intensive, it is important to get an idea about the company management focus towards your business, particularly when the 3PL is an integrated service. A management that is focused on CL business might be inclined to building a long-term relationship and provide a better proposition to the buyer. Company meetings and profile with the management will help in accessing this criterion.
It is also important to check the IT department of the 3PL companies in India. Do not forget to evaluate its expertise and experience in deploying as well as operating the warehouse management system.

20Cube provides superior warehousing services (with distribution facility) at different cities in India and has a full commitment towards its customers.

Post Author: 20Cube

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