Are You Making the Most of Your 3PL RFP?
Tips for a Streamlined 3PL RFP
Have you searched for a third-party logistics provider (3PL) lately? Have you been underwhelmed by the responses they provide to your request for proposal (RFP)? If you find this to be a pattern, then maybe the problem lies not with them, but how your 3PL RFP is constructed.
Before you start your next search for a 3PL, give careful thought to how you’re positioning your RFP. These 12 tips will help you make sure that your 3PL RFP is an effective tool to help you identify the best provider for your business.
- Keep the end game in mind. What does success look like? Having a clear picture of the desired outcome can help you narrow your focus and identify the criteria you will use to select a winning bidder.
- Separate needs from wants. Which features and services are critical as opposed to “nice to have”? Maybe for you speed and costs is critical, but certain value-added services, although desired, may not be deal beakers.
- Start strong. Make sure your 3PL RFP starts with a strong opening statement that introduces bidders to your business and outlines exactly what you’re looking for. Identify all the areas that are most important to you so that the bidder can give you an accurate quote. Consider including the following:
- Operating assumptions
- Volume data
- Timeline (including a due date for the RFP)
- Product/item specification
- Real estate component (warehousing)
- Ask for specifics. Avoid broad, open-ended questions. Instead, identify the exact requirements of the job and ask bidders if and how they can deliver. Providing more detailed information will also help them to present the most accurate pricing possible.
- Clarify product deliverable specifications. Define how your product will be delivered to the warehouse. For example, will it arrive via domestic dry vans on pallets or ocean containers on the floor?
- Specify your real estate needs. What’s more important? Having your 3PL in closer proximity to your manufacturing plant, or your customer base? If you’re unsure, ask the bidder for a recommendation.
- Request dedicated or shared space. Do you need an entire distribution facility devoted to your products, or would you prefer a shared-space environment where the 3PL manages the needs of multiple clients, but may be less costly? Be sure to explain how much flexibility you’ll need for seasonal shifts and long-term growth projections.
- Specify storage needs. Do you prefer to have racking or bulk space? Is very narrow storage an option? Ask your bidder if they’ll be able to design a combined or custom storage solution if needed.
- Identify technology requirements. It’s critical that you define your technology needs up front. Do you maintain proprietary software that your 3PL will need to learn? Or will you require an integrated warehouse management system (WMS) or order management system (OMS) solution from your 3PL?
- Define operational variances. Identify any requirements that may fall outside of normal day-to-day operations, such as seasonal fluctuations, one-off requests, or the need for value-added services.
- Define outbound transactions. How will your customers receive their products? Will you be shipping to a distribution center, retail locations, or direct to consumers? What type of transportation service do you typically use? All of this is important for the 3PL bidder to know up front.
- Establish expectations for continuous improvement. Ask specifically how the 3PL will continue to improve efficiencies and implement cost savings as your company grows.
Finding the right 3PL starts with taking the time to thoroughly map out your 3PL RFP. A well-constructed RFP will help ensure you find a reliable partner that will serve your needs for years to come.
If you’re in the process of seeking a partner for your warehouse and fulfillment needs, then speak to Taylored Fulfillment Services. We’re a fully integrated third-party logistics provider specializing in wholesale, retail, and direct-to-consumer unit fulfillment. Established in 1992 and headquartered in Iselin, New Jersey, we operate 1.5 million square feet of warehouse and distribution space strategically located near the nation’s busiest ports, including Los Angeles, Long Beach, and New York.