Best Practices in Global 3PL Selection

Best practices on the 3pl selection process for a global manufacturer with over 30 worldwide contracts. The company has previously benchmarked their process with other companies in their industry.

3PL procurement challenges

TPT is long for selection and implementation of 3pls while stakeholders need shorter time frames. Areas with highest levels of constraints: 

• Systems integration (Rossetta Net)
• Requirements definition
• Exploration
• Decision points

 
One significant shift in strategy involves pre-positioning whereby preferred/contracted 3pl suppliers are pre-qualified on critical capabilities per type of 3pl per region. Variables ranked include systems, security, locations, etc.

This strategy limits the current practice of carte blanche supplier selection with each new 3pl request. The company has found that where pre-qualification has taken place, the supplier selection process can be avoided. The strategy helps to raise the level of contracting and managed competition, extending the length of contracts and the breadth and scope of services provided by the 3pls. The process also involves:

• Formalized 3pl supplier development
• Continuous development of tier 2 suppliers
• Sharing of business plan with tier 1 suppliers – working with them to ensure services are ready when needed