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Before you Commit to a 3PL Provider, Ask These 5 Questions

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Manufacturers and retailers used to value 3PLs for their physical assets. The very idea of outsourcing transportation and logistics functions evolved as all the elements of the supply chain became part of a single management perspective.  Thirty years ago, pricing was king, contracts were short, and performance was measured in three-year bids. That has all changed. It seems like only yesterday when "3PL" was just a new acronym thrown about at industry conferences and logistics trade magazines to describe a different kind of transportation and warehousing company. Today, Spartan Logistics is appreciated more for our cerebral approach and adaptability to define your strategic direction and execute it.  Let’s say you are the owner of, or you are responsible for, a company that sells or distributes footwear to a segment of the population. Before commiting, ask these five questions of a 3PL provider:    Read More

Topics: Common 3pl Questions

Five Steps to a Third-Party Logistics Marriage You May Not Have Considered

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It seems some of the most successful Fortune 100/500 companies have been able to grow their business profitably by outsourcing their logistics needs. Admittidely, the word "partnership" with a service provider has become exhausted — I prefer marriage.  Just like marriage, you are truly in it to reap the benefits for the long-term.   However, outsourcing isn't for everyone.  There are companies that feel they want total control, and that they can deliver a lower cost per order by handling warehousing, fulfillment and freight internally.  Doing so, some find that there is a greater impact on the bottom line.  On average, a 3PL can provide a lower cost per order compared to internally managed operations.  For those that are interested din utilizing a 3PL, but haven't taken the leap, here are 5 ways we have seen a number of clients get the most out of outsourcing.  Keep in mind that some of the points need to become a part of the negotiation process and expectations early on. 1. Creating a "Win/Win" for Both Parties I recently spoke with the Director of Logistics of a multi-million dollar manufacturing company.  He stated that their average customer had been with them just over 10 years.  They have 10 manufacturing facilities and very little square feet for production overrun in the U.S. and offshore; and they need to be closer to their customers. Think about that for a minute — that says a lot about finding a 3PL in a time when quality, low cost, and time-to-market are key to the business and profitability.  Creating a true union and win/win scenario should be the ultimate goal for both parties.  Here are a couple of things to think about: From your perspective, what are the short and long-term 3PL services you require to grow your business? Are there new systems and services a 3PL partner will invest in to provide first-rate services for your company?  Read More

Topics: Common 3pl Questions

Explaining the Layers of Logistics

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Learning the difference between a Third Party Logistics (3PL) and  Fourth Party Logistics (4PL) as well as 1PL, 2PL, and the rise of even Fifth Party Logistics (5PLs) is both confusing and highly debated among those in the supply chain industry.  While each layer of a logistics provider serves a specific purpose, it's important to remember that there are varying degrees of expertise and capabilities among each. What exactly defines a 3PL? A third party logistics company is one that manages another company's logistics operations department. 3PL is the action of outsourcing all or much of a company's logistics operations to a specialized  company.  For instance, Spartan Logistics provides its customers with turnkey 3PL services- warehousing, cross-docking, inventory management, fulfillment, and transportation services. In 2008 legislation passed declaring that the legal definition of a 3PL is "A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business, but who does not take title to the product."  We 3PL's have a large footprint throughout the country. This makes it viable to service clients in remote regions at a much lower cost than doing it themselves.  3PL's tend to "walk the extra mile" to accommodate many of the responsibilities that would assume a 4PL's role ultimately.            What exactly defines a 4PL? The concept of a 4PL provider is an integrator that accumulates resources, capabilities and technologies to run complete supply chain solutions.  A 4PL company takes over the logistics section of a business, managing the entire process, and at times, the 3PL.  An example here would be an appliance importer-The main function is to import appliances. However, they need to have spare parts (fans, motors, etc.) for these appliances-a 4PL would manage the total logistic operations for the spare parts business. Ok, so what about all the other "PLs?  Read More

Topics: Common 3pl Questions

Contract Warehousing vs. Public Warehousing

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In third party logistics "public warehousing" and "contract warehousing" are common terms. Do you know the difference between them? Did you know "contract warehousing" is a form of public warehousing? We are starting an educational series of posts today with the basic differences between contract and public warehousing as referenced by most 3PL service providers. There are some key differences that should be considered when looking to store your product.  Read More

Topics: Goals, Lessons, Common 3pl Questions