Pick the right logistics supplier for your company

30 September, 2022 Supply Chain Optimization

The best logistics provider to cover your supply chain efficiently, depends on the kind of services you need.

When the time comes to choose your company’s logistics supplier, start by finding out what kind of services you need so you can then pick the supplier that offers the best experience and, therefore, profitability.

Aspects to consider in your selection range from the infrastructure of the logistics company to its control systems for logistical processes; nevertheless, paying attention to their services meeting your business’ needs is essential.

Recognizing suppliers by the services they offer

Surely, you have seen the acronym PL preceded by a number ranging from 1 to 4, but what does it mean?

PL is the acronym of Party Logistics and refers to companies specializing in managing the activities that ensure the correct operation of supply chains. 

The number that goes before the acronym PL talks about the assortment of services offered by logistics suppliers, such as transportation, storage, distribution, planning, and control over the whole process.

Types of logistics providers:

  •    1PL: Deals exclusively with transporting goods from manufacturers to end consumers. Usually, this operation is carried out by the company internally, investing in warehouses and cargo fleets. When we talk about a service supplied by an external company, we usually refer to a company exclusively dedicated to transport services.
  •    2PL: refers to companies who own warehouses and offers distribution services over their own vehicles. These companies help lower the manufacturers’ costs by stopping them from making large investments in facilities and management and by offering them economies of scale by managing the logistics of several clients. 
  •    3PL: Refers to a proper logistics provider because they manage the complete supply chain and aim for the optimal efficiency of the logistics operations by optimizing processes and economies of scale. It is also known as third party logistics or outsourced logistics; its functions include issuing orders, managing warehouses, cross-docking, and reverse logistics. When companies hire 3PL services, the manufacturer yields the control of its goods throughout the complete storage, transport, and distribution processes.
  •    4PL: refers to a comprehensive and highly-specialized service where the logistics supplier not only executes but also plans and designs the supply chain. Its functions range from consulting, developing projects to lower costs and making processes more efficient, to coordinating with other suppliers who will carry out the services.

To guarantee a successful relationship, the hiring company needs to share with the 4PL supplier sensitive information on operations and strategic plans so the logistics partner can build its activities according to the company’s goals.

Choosing the right supplier

Once you have defined what kind of supplier you need according to the services you require, you go to the stage where you choose one that helps you boost your profitability.

It is quite common to search for a supplier on the internet, make sure the company you are thinking to hook up with has the necessary knowledge, expertise, capacity, and reach to guarantee efficiency in your supply chain. Besides considering the size and technology of its facilities, and in the reach of its strategic connections in the country and around the world, look for recommendations form current clients and rating in the industry to corroborate the robustness of its proposal. 

The following are some of the capacities you should check the supplier meets to ensure the success of your logistics processes:

  •    Service’s professionalization: Specialization and professional training are essential aspects to ensure the whole process flows without mishaps. If a supplier has industry certifications speaks well of their seriousness, care, and attention they place on their services. Being always updated on your sector’s information is also an additional advantage to consider. 
  •    State-of-the-art technology: The most advanced systems expedite the handling of goods, eliminate human error, and guarantee an efficient management. A key aspect to consider is how compatible your company is with the 3PL supplier in terms of technology so you can avoid issues during the integration stage that may complicate daily tasks such as order documentation, visibility of purchase orders, cross-docking support, or inventory management. 
  •    Customized attention: The supply chain and its processes must be designed based on the specific needs of your company. Look for a supplier who shows flexibility in their services and innovation in their solutions by adapting to your internal processes and meeting your business’ goals. 
  •    Ease of communication: It is important to keep a flowing and open communication with your supplier to make it easier to solve problems and take advantage of opportunities. Choose the company that offers constant attention through, for example, a 24/7 service center that lets you have visibility on your cargo and processes always. 
  •    Commitment to continuous improvement: It is not enough for a logistics supplier to offer quality service when you hire its services, it must pledge continuous training and the adoption of the sector’s newest trends to improve its services for you. Innovation is also a major element to consider. 
  •    Adaptability: The flexibility to respond quickly to the changing logistics’ needs of your company and the markets’ is a highly valued factor in such a competitive environment as today’s. Moreover, in a time when sustainability is a priority of the demand, choose options that follow this path. When assessing the proposal of every 3PL, make sure they can follow your same values and sense of responsibility to meet their commitment to you.

Hiring a logistics supplier demands analyzing your needs and researching the options available in the sector.

Keep in mind that more than a supplier, the logistics company you choose will become your partner for ensuring customer satisfaction and boosting your business’ profitability and competitiveness. 

Solistica offers comprehensive 3PL solutions involving people, intelligence work, experience, and resources to meet the logistics goals of its clients, who can be certain their products are transported with safety and precision to their destinations.

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