Successful 3PL outsourcing is not only about getting your work done but also about creating a fruitful relationship with your provider of 3PL Melbourne. Whether you are experienced using the services of a 3PL provider, or just starting to consider outsourcing, building a strong relationship with your 3PL provider is essential to ensure success from outsourcing logistics. A strong relationship plays an important role while you continually work with your 3PL provider. It does not matter if you are focused on increasing the amount of work your 3PL provider completes for your business, aligning them to your strategic goals, gaining an increased commitment, or getting their best resources to work for you, the relationship with you have with your 3PL provider plays a very important part.
Building this relationship takes time and positive experiences from both sides contribute to building the relationship. It involves doing many things correctly, such as having a mutually agreed contract (not one-sided), periodic evaluation, co-planning the future, creating open channels for communication, and management commitment. Building a long-term relationship requires trust, understanding, transparency and support from both parties and in return, provides benefits that include better throughput, hassle-free operations, happy customers and ultimately, an overall win-win for both sides.
Read on to learn 5 tactics that will assist you in developing a fruitful relationship with a 3PL Melbourne and how you can implement these into your business.
1) Define the relationship
A well-defined relationship with your provider of 3PL Melbourne will provide long lasting benefits and assist in your business growth. Prior to outsourcing your logistics services, it is beneficial to define your needs so you can choose the most appropriate 3PL services and 3PL provider. An undefined relationship with your 3PL provider, in terms of either service level or cost model, is likely to have a negative outcome with service level and or customer satisfaction level. 3PL service options are vast and not all providers of 3PL Melbourne will be capable of fulfilling your business needs. Therefore, to set up your business for success, define your logistics needs in advance, choose a 3PL provider as per your need, and define your relationship with the 3PL provider from the very beginning. This tactic will assist you to avoid future problems.
2) Pre-define roles, responsibilities and liabilities
Johann Wolfgang von Goethe once said, “precaution is better than cure.” Pre-defining roles, responsibilities and liabilities is a precaution that eliminates uncertainty, increases transparency, saves time and speeds up the process. In absence of this clarity, a provider of 3PL Melbourne may underperform, thus creating a bad perception about of 3PL providers. In this situation, the real culprit is the absence of pre-defined parameters. A lack of clarity decreases service level, increases costs, and can sabotage a 3PL relationship. At the beginning of the relationship, define the Standardised Operation Procedures (SOPs), including roles and contacts, responsibilities, processes and liabilities prior to starting the operation. By doing this, you will remove uncertainty and provide clarity which will benefit the relationship you have with your 3PL provider.
3) Periodic evaluation
Risk, responsibilities, liabilities and additional services detailed in the 3PL contract should be reviewed periodically, as they may need to be redefined according to the business needs. Market fluctuations, government policies and strategic decisions are some of the major factors that may result in changes in some of the earlier defined parameters. If not reviewed periodically, these may lead to ambiguity between the business and 3PL providers in Melbourne, Sydney or Brisbane with the potential to create disputes in the future. Periodic evaluation of the contract and operational processes will ensure that the changes are recorded in the contract accordingly enabling stronger long-term relationship.
4) Open and frequent communication
In any supply chain, information flows from both the sides. Information related to sales forecasting, inventory norms, cut-offs, Standard Operating Procedures (SOPs), statutory charges and operational or strategic challenges/changes should be transferred frequently between the 3PL provider and supply chain managers. This two-way communication assists in creating customised solutions. Two-way communication also assists in managing expectations from both sides for maximum output and reduced errors. Incomplete, inaccurate or sluggish communication hampers service levels, which directly affect the customers’ business and performance of the 3PL provider. Creating open communication assists 3PL providers to provide services in line with expectations and to meet contracted service levels.
5) Efficient finance management
No business relationship can be fruitful without efficient finance management. When outsourcing business to 3PL providers, the pricing model with credit terms and conditions needs to be clearly agreed with upfront. Failure to achieve the desired profit, over expenditure, delay in payments or large outstanding invoices are circumstances that create dissatisfaction and negatively impact relationships. To maintain a good relationship, businesses should avoid over-due payments, situational negotiations, mismatched account statements and undefined clauses for consequential losses. Positive management of such circumstances will build resilience into the relationship, which is good for all concerned.
A fruitful relationship with your 3PL provider benefits both sides with seamless operations, a better understanding of the customers’ needs and trust, which leads to better end-customer satisfaction. Achieving these is dependent upon transparency, open communication and a mutually agreed contract. Having a poor relationship between both parties can result in frustration, disappointment and a negative impact on performance and cost. At each stage, a contribution from both organisations is required to maintain and build the relationship. Established 3PL providers, such as BCR, understand the importance of the relationship with the customer and are eager to take that extra step to make the relationship fruitful.
For more than a century, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).