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Third Party Logistics (3PL or TPL)

Published: Jun 22, 2020   |   
by: ImpactFS   |   
Category: IFS Blog

Want to Increase revenue, Improve market share and Reduce cost.

Whether you are happy with your present service provider or just looking for a new partner, you will have better results with an strategic approach in order to make a positive impact in your supply chain.

Think about how to get the most of your 3PL in order to achieve your goals:

Start with the end in mind = IMPACT YOUR BRAND laughing
What that looks like in your case?

1. Share your vision and goals with your potential service provider
2. Make sure to add Value verifu you fully understand what makes your client happy ( all about Your Client Success) and fulfill those client needs and make those a top priority on your service request to the 3PL, for instance:

a. Will orders require premium packaging (custom box, gift box)?
b. Will orders require different case pack?
c. Will orders require special product assortment?
d. Will orders require a reverse logistics process?

3. Define clearly SOW and timeline
4. Process a RFI, RFQ with a service provider that accept the challenge not only to present a scalable but also cost effective solution.

Today more than ever if you are not yet then you should consider to be in the Ecommerce ecosystem in order to make a positive Impact in the market place.

5. Focus on CPO
Ecommerce fulfillment cost per order (CPO) is the sum of all the warehousing expenses involved in inbound freight or receiving, put away, initial and recurrent storage of product, picking, packing, shipping and reverse logistics / returns processing from clients.

How can we calculate CPO?
From the statical records:

* Annual net sales – Returns
* Annual orders shipped
* Total order lines
* Annual boxes shipped
From actual P&L expenses:
* Total direct and Indirect labor > All warehouse & order fulfillment activities
* Total facility cost
* Total packing supplies

Calculating CPO
Here will find helpful calculations that will give a great understanding

> Total fulfillment center cost per order:
Total fulfillment center costs / by Annual orders shipped
> Total fulfillment center cost per order line:
Total fulfillment center costs / by Total order lines
> Total fulfillment center cost per box:
Total fulfillment center costs / by Annual boxes shipped
> Total fulfillment center cost as a percentage of net sales:
Total fulfillment center costs costs / by Annual net sales then multiply by 100

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