We’ve all heard the saying, “Time is money,” and nowhere is that more true than logistics, where efficiency is the name of the game. After all, as our economy shifts further online and customers expect faster turnaround times, the last thing you want is to be labeled as “slow.” But simultaneously, you can’t overemphasize speed at the expense of quality and accuracy. Otherwise, you risk diminished customer satisfaction when their shipment experiences transit damage or they receive the wrong order.
As the stakes get higher and higher in the ecommerce world, many companies are trusting the outsourced fulfillment expertise and capabilities of a third-party logistics provider (3PL) to help them navigate increasing demands. However, all 3PLs aren’t created equal, so it’s key to track your 3PL’s KPIs to ensure you have a worthy partnership. And perhaps the most important KPIs you should evaluate are efficiency and customer satisfaction within your 3PL’s warehousing operations.
A 3PL’s Role in Outsourced Fulfillment
Before we dive into how to evaluate the efficiency and customer satisfaction of your 3PL partnership, it’s first important to understand a 3PL’s role in outsourced fulfillment. In the ecommerce world, some companies have their own order fulfillment process, receiving orders, packing them properly from inventory, and shipping them directly to the customer while replenishing their stock behind the scenes. Yet many ecommerce companies don’t have the time or resources to do this all themselves, let alone master it. That’s where a 3PL’s outsourced fulfillment capabilities really start to matter.
Based on its expertise, resources, and manpower, your 3PL can oversee the entire supply chains of multiple ecommerce clients, managing fulfillment, warehousing, transportation, and more. And when done right, your 3PL allows you to devote your own time and resources to your company while your logistics are handled properly; plus, your 3PL’s outsourced fulfillment capabilities should allow you to scale your operations and meet customer demand. With that said, what should you look for when evaluating the efficiency and customer satisfaction of your 3PL’s capabilities?
Putting 3PL Efficiency Under the Microscope
The following are critical aspects of efficiency that your 3PL’s warehousing and outsourced fulfillment operations should provide:
Strategic Inventory Management
Maintaining efficiency means your 3PL can optimize your inventory throughout its warehousing operations. Simply put, you can’t fulfill orders if you don’t have items in stock. Your 3PL should have a positive track record of avoiding stock outs while also not having too much stock on hand. Even better if your 3PL’s inventory management prowess allows you to be flexible and scalable as demand shifts throughout the year.
Reliable Order Processing
Your 3PL should allow you to process customer orders quickly, but also accurately. This helps when your 3PL utilizes modern technology like SKU numbers and barcode scanners to more quickly locate orders and maintain accuracy, as well as shipment tracking capabilities to ensure orders reach the right place. No matter the step in the outsourced fulfillment process, each pick, pack, ship phase should be efficiently executed.
Streamlined Transportation
Remember how time is money? Your 3PL should have ample, strategically located warehouse space and the right carrier relationships (plus the ability to coordinate well between them) to ensure your items are not only shipped quickly, but also cost-effectively.
Analyzing Your 3PL’s Customer Satisfaction Track Record
While efficiency is important, you also want to make sure your 3PL’s outsourced fulfillment capabilities are making your customers happy by analyzing these measures:
On-Time Delivery
Is your 3PL consistently meeting your promised shipping times, or are your orders getting delayed? Earning your customers’ trust and meeting their expectations is critical to maintaining their loyalty and satisfaction.
Cost Savings
Your 3PL’s warehousing and outsourced fulfillment operations should remain cost-effective in the long run as you scale and grow. If so, this should allow you to pass along these savings to your customers, allowing you to offer cheaper shipping costs than your competitors.
Returns Processing and Customer Service
Returns, exchanges, and unforeseen issues are inevitable. Your 3PL should offer the resources and manpower to provide you with timely and responsive returns management and reliable customer service capabilities to promptly amend any customer issues.
Customer Feedback
In evaluating your 3PL’s warehousing operations, make time to solicit customer feedback through surveys and reviews. This feedback can provide clear indicators that your 3PL partnership is translating into positive customer satisfaction.
Finding the Ideal 3PL Outsourced Fulfillment Partnership
No 3PL is perfect, but if you find one that provides strong efficiency and customer satisfaction in its outsourced fulfillment and warehouse operations, it can pay major dividends. At Smart Warehousing, our track record of success as a 3PL has made a major impact on ecommerce clients nationwide. To learn more about our outsourced fulfillment capabilities, contact us today.