I stumbled upon an article recently that talked a little bit about how users of 3PL (third party logistics) and fulfillment companies should be more hands off with their outsourced provider and “let them do their job.” You can probably imagine that this article was written by an executive at a fulfillment company. And this is most likely in reference to the general complaints of many 3PL’s that their customers have a tendency to push the limits in terms of customization and, on some occasions, with attempting to control the overall warehousing and fulfillment process to a certain extent. While I do see the perspective of the 3PL with regard to being allowed to “do their work”, and while there are some great advantages regarding using systematic processes across all customers that are more rigid than flexible, there’s an entire argument for the flip side of the coin. More specifically, in my humble opinion, a more balanced approach should be taken to incorporate “customer involvement” in the 3PL process.
Striking the Right Balance with Customization
Let’s face it, one of the main reasons smaller and mid sized companies utilize the service of an outsourced third party logistics firm is to capitalize on a more customized level of service, rather than succumbing to the “one size fits all” box that larger 3PL’s tend to force their customers into. Generally speaking, smaller fulfillment companies are more willing to do what the customer asks in order to win and maintain the business. This might be a slight deviation from the standard process, or an added step in order to provide a value add for their clients. These can all be very important and critical to the merchant or manufacturer of goods, as it helps them to maintain a great service level for their customers, which leads to continued and potentially increased sales for the merchant and order volume for the fulfillment company. Flexibility is one of the keys to success for businesses using outsourced fulfillment services. But, I would argue, flexibility and customization that can be codified into a process and backed by some level of automation or quality control is a necessity. In other words, striking a balance between flexibility and control is necessary to not cross the boundaries of knee-jerk customizations that can cost everybody business due to errors.
Control is an Outsourced Relationship Should be Balanced
An outsourced partner is somewhat like an “employee” of the company, except that they don’t reside within the same office (usually) and they aren’t subject to payroll tax. And in the case of logistics, the stakes are extremely high, so taking the outsourced relationship serious and treating it like an employee relationship that requires ongoing “management” and “accountability” is not only healthy but also necessary. 3PL providers shouldn’t be on an island and they should be allowed the freedom to do as they will – especially since they have so many customers with so many varying needs. A business owner using outsourced fulfillment should find the way to strike a healthy balance when it comes to checking in on the process and making sure that performance objectives are being achieved.
When Too Much Control Becomes Troublesome
But just as it’s wrong for the 3PL to wield far too much power, so too must the business owner guard against exerting too much control over the outsourced provider. The best relationships, both in terms of internal employees and outsourced providers, come from the perfect balance between structure and freedom. When the business exerts too much control, questioning every aspect of the process, then it not only takes up valuable time of the fulfillment firm, but also restricts the freedom that the 3PL needs in order to maintain a healthy balance over its process for ensuring high quality shipments of orders in a timely fashion.
So leaning too far in the direction of either the 3PL or the customer can quickly become problematic. Therefore, both parties should strive for a balanced approach that respects the integrity of the process and the flexibility needed to create enduring logistics experiences for end customers.