The "Secret Sauce" to Selecting a 3PL Partner

Reducing Costs and Improving Customer Service via New Fulfillment Partner

Project Type: Warehousing / Fulfillment 3PL Partner Selection

Worsening fulfillment performance and rising costs were causing frustration for a food manufacturer. With limited visibility to current inventory levels, missed shipment deadlines, and poor customer service, our client had a messy situation on their hands.

While our client believed there were better options for a fulfillment partner in the market, the process to find and switch to the right partner seemed daunting, especially considering it took four months just to get to a proposal with a potential partner and it was nowhere near what they needed. To expedite the fulfillment partner sourcing initiative, our client engaged AMEND to drive the requirements definition process and survey the market for qualified options.

Within 6 weeks, AMEND had developed the RFP to source potential partners and receive pricing proposals for comparison. AMEND narrowed the partner pool to three viable options, validated the cost and service improvements our client could expect from implementation and advised on final partner selection and implementation.

We worked with warehouse leadership and operators to select a warehouse management system that supported current and future state operational requirements and delivered visibility to warehouse leadership on warehouse performance and productivity.

Overview

  • Company Overview

    • Industry: Food Manufacturing / Distribution, Retail, eCommerce Distribution
    • Est. Revenue: $10MM/Year
    • HQ in Cincinnati, OH with manufacturing in Chicago, IL and Dayton, OH and Fulfillment Operations in Chicago, IL and Cincinnati, OH

  • Assessing the Landscape

    • Retail grocery and eCommerce-focused business that distributes 50+ specialty products
    • Ships product via traditional eCommerce package options, customized kitting solutions, and bulk freight methods
    • Various customer sizes ranging from individuals to mom & pop grocers to large-scale grocery networks
    • Lean/stretched management team focused on driving the business forward and reliant on leveraging external partners to scale operations and supply chain capabilities

  •  Identifying Opportunities

    • Limited access to real-time, information, customized reporting and inventory levels / accuracy
    • Lack of visibility to cost drivers and cost reduction avenues with current fulfillment partner
    • Continual damage of premium product during shipments to customer
    • Inability to meet on-time shipment and delivery standards for expectant retail and eCommerce customers

I. The Process

Problem State & Requirements Definition

    • Analyzed current state pains, identified 40+ requirements that enable effective fulfillment and warehousing operations today and 3-5 years in the future

 

Vet Market Offerings & Narrow Pool

    • Researched potential partners within geographic proximity to operations, compared qualifications against defined requirements, reviewed use cases and pricing, narrowed to 2-3 valid partners

Selected the Right System for Today and Tomorrow

Considering the client's most important operational drivers for today and the future helped drive our selection of the right solution and partner, leading to a successful implementation and operation.

II. The Solution

Mapped Current & Future State Processes

Identified 49 partner requirements across 12 weighted categories that were applicable to our client’s current operational pains and desired future state capabilities in the warehousing and fulfillment arenas. These requirements outlined the means to manage order fulfillment and inventory control effectively and affordably via integrated technologies, clean execution, and quality customer service.

Matched Marketing Offerings with Key Requirements

Researching and vetting market offerings to align with our client’s requirements took time, attention to detail and repeated use case walkthroughs to match partner capabilities to client needs. Ensuring the potential partners deeply understood our client’s specifications helped determine if a partner was truly equipped to handle all possible client requests.

Validated Savings & Service Improvements

Claiming savings and service improvements will follow implementation is very different than walking the process and understanding the details behind fulfillment execution. We followed various order types through order receipt, item picking, packing, and shipping, and finished with cost expectations for all order types that aligned with the proposed pricing structure. Our client was given visibility throughout the entire fulfillment process via the partner’s technologies and confirmed the integration method to connect client and partner systems.

III. Results

7

Viable Partners
Identified and Vetted

45%

Cost Reduction Opp Identified Via Partner Switch

100%

System Integration and Access to Real-Time Data

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