Choosing an Order Fulfillment Partner
We go by many names – 3PL, Pick & Pack, Order Fulfillment Centers, etc. And there are many of us. With the proliferation of on-line shopping, the number of companies similar to Alternative Logistics is growing rapidly. So how do you know which one to work with?
There are the obvious differentiators — location, hours of operation, available warehouse space, services provided, etc. And there is cost – we all have different rates depending upon our size, location, and levels of service. But even then, you may find several of us to choose from.
In a previous career, I was the operations manager for a small company that designed industrial products. We worked with a contract manufacturer for all of our inventory management and order fulfillment. What made the relationship work is that the other company put themselves in my shoes – they did everything they could to become more efficient and keep my costs down.
Now that I am on the other side of the fence, I have brought the same philosophy to Alternative Logistics. My goal is to always look at things as our clients would.
A consultant recently made the comment, “It is in your (Alternative Logistics’) best interest to be inefficient so you can charge your clients more.” That is absolutely not the case! That philosophy might work in the short run, but never in the long run. I know all of our clients are in competitive markets, and they need to continually lower their costs. As their partner, it is my duty to constantly seek ways to become more efficient so we can lower their warehousing and order fulfillment costs.
Over the past year, Alternative Logistics has invested close to $100,000 in facility and equipment upgrades in the name of efficiency. We have bought flow racks, cantilevered racking, shelving and carts. We are in the midst of a software upgrade to streamline our administrative tasks. And in a subsequent post I will describe the automation equipment we have obtained that has reduced the time to perform certain tasks by over 75%. Since most of our clients pay us on an hourly basis, they are getting much more work done per dollar spent.
So, when you are evaluating order fulfillment companies, can you assess their core philosophies? Do they view clients as cash cows, or someone that they can partner with? Are they constantly assessing processes and procedure, and will they invest in new equipment, to become more efficient? How often do they have price increases? Does their corporate culture mesh with yours?