Four Key Operating Principles of Successful Modern Third Party Logistics Companies

We often think of third party logistics (3PL) companies in terms of a transactional business relationship. However competition. and the ever-changing field of logistics. has forced 3PL companies to adapt and evolve to meet the changing needs of their clients. What has emerged is a trusted partner whose primary goal is to add value in complex global supply chains. In order to form a successful partnership with a 3PL today, there are four keys principles that must be a part of their organizational DNA.

Results

The complexities and growing demand placed upon its client’s supply chains demands that the first goal of a 3PL is results. This means there has to be an emphasis placed on on-time delivery, minimizing costs, reducing inventory levels, improving freight performance, and minimizing delivery lead time.

Technology

Third party logistics partners must make use of the most up-to-date technology in order to provide transparency to their clients through services like proactive tracking and tracing of packages. Technology brings discipline and visibility to clients, and provides a platform for increasing operational efficiencies. The 3PL should have a highly trained and responsive IT team that is flexible and ready to respond to changing transportation scenarios.

Commitment to Lean Principles

It’s a must for 3PLs to place a high value on lean principles. The globalization of commerce requires the operation of a lean business. A 3PL must be committed to eliminating waste and focusing only on those things that bring value to the table. They must have a culture that focuses on problem solving. Once every member of a supply chain team is on board and empowered to resolve problems, the results can be amazing.

Dedication to Continuous Improvement

3PLs need to have an aggressive approach to continuous improvement. Their team members should produce new, actionable ideas on a frequent basis, that provides a competitive edge to its client’s supply chains. As part of the 3PL’s commitment to continuous improvement, it should provide all the resources that are needed to help its clients achieve success including people, services, processes, and technology.

A relationship with a 3PL should be viewed as a strategic partnership for the mutual success of both companies. The existence of these four keys are critical for achieving this goal. A 3PL that doesn’t have a foundation built upon these key principles is unlikely to survive in the ever-changing world of logistics.…