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All too often, outsourcing with a 3PL doesn’t work out as expected. We see it all of the time – businesses looking for a more suitable logistics firm because their relationship with their current provider isn’t working. One of the most commonly overlooked mistakes that businesses make (aside from failing to use appropriate standards when choosing a fulfillment company in the first place) is to not have a full understanding of how to hold a 3PL accountable.
In order to hold your 3PL accountable, you must have goals in place and you must measure performance on a regular basis. The easiest way to do that is to establish Key Performance Indicators (KPI’s). Every time you review performance with your 3PL warehouse, you can go over each KPI and monitor whether or not they are achieving the goals.
Before you put your KPI’s together, it will be helpful to take a step back and make sure you have the knowledge and processes set up to foster a working environment of trust and transparency. We’ve put together a short list of things that you can do to make sure you are well able to manage your 3PL.
Here’s a few tips on what to measure as a KPI:
By holding regular meetings to discuss these “high level” metrics and the overall strategy, you’ll see your 3PL relationship blossom.
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