In today’s highly competitive logistics and supply chain space, 3PLs must focus on staying ahead of the competition while minimizing costs. Building the fanciest mousetrap is only okay if customers are willing to pay the price. Cost-conscious 3PLs use these basic strategies to stay ahead of their competitors.
Keep your employees
Employee turnover increases costs and hurts the bottom line. Recruiting and training new employees is also expensive. It’s less expensive to increase salaries and benefits for existing employees than it is to recruit, hire, and train a new employee.
There is also the financial and organizational risk that things don’t work out with the new employee.
Invest in your employees
Hire quality people. Provide training and timely performance feedback. Training does not need to be outsourced at additional cost. Instead, use direct management resources to reduce training costs. Involve your employees in the development of the training to better understand where their knowledge gaps are.
Structure task assignment
Use experienced staff to perform putaway tasks. You know the product and storage locations. This helps keep productivity high and shrinkage low. New employees should start processing outbound orders to learn about the products and processes. Outbound is also easier for supervisors to monitor and audit during the unpacking phase.
listen to customers
Industry experts can claim that the latest trend is critical for 3PLs and “now is the time to invest in the future”. Has any customer or prospect asked about this trend? What was her answer when you asked her about the trend? If customers don’t see the value and aren’t willing to pay for the service, a 3PL would be foolish to subsidize the cost.
Providing business intelligence to customers
The systems of a 3PL contain important data for customers. A good 3PL helps turn data into actionable information that customers can use to transform their business. BI&A tools don’t have to be expensive. Research what’s best for your business and your customers. Many customers these days expect BI&A tools to be desk poles, but there’s no reason to overspend on the solution.
Listen to employees for continuous improvement
Employees working on the front lines have valuable insights into what works and what doesn’t. Leverage daily standup meetings combined with regularly scheduled continuous improvement workshops to gain valuable insights from those doing the work. Continuous improvement drives waste out of operations to improve the bottom line.
A structured cycle count program that addresses discrepancies as they are discovered improves inventory accuracy. Improved accuracy, in turn, reduces claims paid to customers. Prevent claims, improve the bottom line.
Measure and manage compliance KPIs
Focusing on increasing outbound orders is wasted if the orders picked are inaccurate. Compliance accuracy must be monitored, otherwise damage costs will affect the bottom line.
Network with like-minded people
Industry associations are a great way to keep up to date with what peers and competitors are doing. Involving peers and competitors is likely to provide a wealth of information.
Offer service customization
Many 3PLs will argue that customization increases costs and should therefore be avoided. It increases the cost. Be flexible when dealing with customers, adapt solutions and charge accordingly. Ensuring that fees are fair and correct prevents the 3PL from sacrificing the bottom line.
The best way for 3PLs to stay ahead of the competition without sacrificing the bottom line is to focus on the basics. Let your competitors distract you and lose focus on the essentials. Successful organizations focus on the details every day. Not focusing on the basics will result in expensive lessons.
Adam Zaranski, Director of Sales & Marketing at Boxzooka Fulfillment & Global Ecommerce, has over 25 years of sales and operations management experience in e-commerce fulfillment, logistics and supply chain. Before joining Boxzooka, he held various sales and operations management positions at companies such as Ryder Supply Chain Solutions, Kane Logistics, Airborne Express, Select Express & Logistics, Unilever HPC and The Home Depot. He has a BS in Logistics and Transportation from the University of Maryland and an MBA from Fairleigh Dickinson University.