The dissatisfaction of a 3PL’s performance over time can be a result in lost expectations. If the initial RFP did not request the right information in regards to potential scope creep, then both parties could be unequivocally frustrated at the end of the contract. This dissatisfaction can be traced to the origin of the outsourced relationship—in most cases, a request for proposal (RFP).
Drafting a good proposal document and asking the right RFP questions is essential to running a successful competitive bidding process and reducing the risk of selecting the wrong provider. Here are 10 RFP questions to ask in your next logistics bid.
Value Proposition Questions
1. How does your company distinguish itself from other companies, and why is selection of your company the best decision we could make?
2. Describe your commitment to innovation. Specifically, how will you work with us to introduce new technologies or enhance our processes and optimize our total cost of doing business together?
Operating Philosophy Questions
3. What is your operating/management philosophy?
4. What is your continuous improvement methodology? (I.e. Six-Sigma, TQM, etc.)
5. Describe why your organization believes it is uniquely suited to provide the above-mentioned services to (insert RFP customer name here).
6. How does your company align with our company (values, culture, etc.)?
Pricing/Risk Management Related Questions
7. What is your company’s general approach to risk management? What measures does your company take to minimize the probability and impact of supply chain disruptions?
8. Please describe your approaches to risk sharing (e.g. gain/pain share programs) and provide examples of different approaches.
Transition/Human Resource Questions
9. What is your typical implementation timeline for a project of similar scope?
10. What is your company’s philosophy for obtaining and managing labor? For instance, do you prefer to hire and manage full-time employees? Part-Time/Temporary Employees? A mix? How do you determine labor rates for your employees?
Other Aspects to Consider
One of the best ways to make sure you’re choosing the right 3PL is to take a careful look at your company’s culture and the culture of the logistics provider you’re considering working with. When you do that, you can see if there is cultural alignment. Without that alignment, there can be conflict between the two companies that will mean a loss of competitive advantage. Naturally, that’s not something you want – or can afford – to lose.
Metrics and benchmarks are other important areas to address when you’re considering hiring a 3PL partner for your company.
You and your partner have to be on the same page when it comes to what is important, and how you measure success.
If you don’t share an opinion on that issue, you could end up struggling with the total costs, the lack of on-time performance, or other issues. Trends in logistic outsourcing are moving toward companies that are true partners, not just those that are hired to perform a service.
To Sum It Up
Selecting the right 3PL for your business is one of the most important decisions you can make. By having a true partnership and following the trends in logistics outsourcing, your company can move toward a higher level of success. No business relationship is going to be perfect, but there are many ways to use logistics RFP best practices to locate a company you mesh well with, both from a cultural standpoint and with the ease of doing business.
To learn more about how to select the perfect partner, download our Ultimate RFP Toolkit for Selecting a 3PL. The kit includes everything you need to write your next logistics bid.