How To RFP A Third Party Logistics Provider
7 tips before you send out an RFP to a third party logistics provider
Sending an RFP to a third party logistic provider is generally not very different from RFPing any other service provider. Your RFP will need to describe your company, its general needs and the specific services that it requires to fill those needs. Bear in mind, though, that a 3PL provider plays a different role in your business than many of the other vendors that you deal with. The nature of third party logistics means that it may need to tightly integrate into your business while also offering multiple services. With this in mind, here are seven tips to keep in mind as you prepare to send out RFPs:
-Build a team to build your RFP. For the RFP process to successfully find the right third party logistics provider, you will generally need to include all of the stakeholders in your company. This way, you’ll have a complete sense of.
-Provide enough information to bid. It’s reason to expect your 3PL company to know the logistics industry, but the company probably won’t know your company, its issues and its needs. The more information that you give in your RFP, the better the job that the companies will be able to do in preparing a comprehensive and accurate bid. It will also make it easier for you to compare bids from multiple companies if they’re all based on the same data instead of being based on differing sets of assumptions.
-Ask intelligent questions. In addition to asking for a specific bid tied to your needs, you may want to add in some questions that will help you gauge how the 3PL company does business and how it works with its clients.
-Create a sense of exclusivity. If the companies that receive your RFP know that they’re one of a small group of pre-vetted candidates, they’re more likely to take the time to prepare a meaningful response.
-Keep the process as quiet as possible. If your existing provider of third party logistics services finds out that his job is out for bid, your company’s service could be interrupted. This is doubly important if you’re planning to transition supply chain employees away from your company. At the same time, keeping both the RFP and the responses confidential will help you and the vendors to freely exchange information without having to worry about it ending up in the wrong hands at the end of the process.
-Set reasonable time frames. If you have a complicated and detailed RFP, a 3PL won’t be able to respond in a day or two. Give them time to do a good job for you.
-Realize the limitations of the RFP process. While judging a company based on its response is part of the process, what you get on paper from its sales team may be very different from what you see when you visit its location or when its team comes to yours. The right third party logistics provider looks as good in person as it does on paper.
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