The 3PL picks up Kids' Headquarters containers at the ports of Los Angeles and Long Beach, draying them to Weber's paperless warehouse in Norwalk, Calif.There, the products are prepared for direct distribution to more than 1,500 retailers."If you don't do this, you'll start the relationship off wrong," he says. In some cases, the top logistics or operations executives making the outsourcing decision don't include lower-level managers in the decision-making process.
But they may get overlooked by companies that consider only the best-known providers.
While most companies won't knowingly provide a 3PL with bad data, they may provide information that is incomplete or inaccurate because that's the best data they have.
In addition, critical sources of information—such as operations personnel out in the field—may not be asked to provide data, as they're left out of the outsourcing process.
Companies that work with a 3PL can reap great benefits, but there's no guarantee that an outsourcing effort will be successful. Lynch is author of Logistics Outsourcing: A Management Guide. Then, Lynch advises, go through a rigorous make-or-buy evaluation process before making the decision to outsource. "One of the biggest reasons for failure is that the outsourcing company doesn't totally understand what they're outsourcing," Baylin observes.
"Missed deliveries, unfilled orders, customers who are screaming, and technology that doesn't work are all potential consequences that you risk if you don't pick the right 3PL," warns Julie Baylin, president of Harkness Wilder LLC, Evanston, Ill. "Many companies try to outsource problems," notes Lynch.