How to Request 3PL Proposals
Thoroughness and honesty are the keys to a successful 3PL request for proposal (RFP) bid process, according to Will O’Shea, chief sales and marketing officer for Atlanta, Ga.-based logistics provider 3PD Inc. Here are his tips for getting the best results from your 3PL RFP.
1. Be selective. If you send out RFPs in a cattle call, your candidates may not participate or respond with their “A” game. Nor will your internal team be able to dedicate the proper time to evaluating each response.
2. Do your homework first. Issue a Request for Information (RFI), which is less time-consuming to construct and respond to than an RFP. Use the data you collect to create a short list of five or fewer candidates for your RFP.
3. Know your performance objectives. Solicit input from all the key players in your supply chain about the performance, pricing, and productivity levels they hope to achieve through outsourcing.
4. Standardize. Many 3PLs urge companies to leave room for creativity in their RFPs so they have the latitude to craft a more effective solution. But don’t structure your RFP so loosely that you can’t compare one 3PL to another. Spell out your goals and objectives in clear, concise language and urge providers to respond to the same questions in the same way. You’ll avoid being swayed by the provider with the best gift of gab over the one that’s the right fit for your challenge.
5. Introduce yourself. Expect your 3PL candidates to have a high level of knowledge about your industry or a particular service/geographic area. But don’t expect them to know everything about your company, especially if it isn’t a household name. Provide candidates with pertinent facts about your organization and its supply chain challenges.
6. Be discrete. With a binding two-way confidentiality agreement during the RFP process, your candidates can be confident that what they say goes no further than your selection committee. It keeps the selection process from interfering with current day-to-day supply chain activities, especially those being performed by 3PL personnel who might be affected by the outcome.
7. Ask better questions. Don’t ask the same old tired RFP questions. Weed out the weak ones, refine the keepers, and add some new ones to inspire insightful answers. Two suggestions: “Share a situation with a client that didn’t go as well as you’d hoped and explain how you worked through it” and “Show us a process map of how you’d fulfill a typical order for one of your current clients.”
8. Value corporate compatibility. Finding a 3PL whose corporate values and philosophies are compatible with yours is essential. Build specific questions into your RFP to get to the heart of this issue.
9. Keep it real. Be realistic about how long you give candidates to prepare a response. It takes time for 3PLs to run optimizations and simulations, particularly if they’re creating multiple iterations.
10. Don’t believe everything you read. An RFP is just one step toward finding the 3PL that’s right for your company. Make every effort to conduct at least one thorough site visit and have some face time to make sure the 3PL hype lives up to the reality.