Touring A Fulfillment Center Is Crucial Before Making Your 3PL Selection
The process of finding a new fulfillment provider is not as easy as numbers on a spreadsheet or written responses during the RFP process. One of the most critical steps in finding the right fulfillment center for your business is visiting and touring the distribution center.
Seeing the inner workings of a fulfillment center’s operations firsthand will help you validate that a 3PL’s submission during the RFP process reflects their operational reality. When touring any facility, here is a handy list of the top things that you need to observe to ensure the 3PL you choose is right for your business.
Cleanliness and Organization:
One of the easiest things to notice is the cleanliness and organization of the facility when you walk in. During your tour, look for employees picking up trash from the floor. In particular, notice if any sales and operations leaders are pitching in to help. This could indicate a strong team mentality, and show that exemplary behavior is modeled from the top.
5S/LEAN practices:
The next level of a clean and organized fulfillment center is 5S and LEAN practices, gold standards in process improvement that focuses on reducing operational waste. A good 5S/LEAN environment should have obvious markings on the warehouse floor labeling locations, as well as clear walking areas to avoid forklifts. All work spaces and terminals should look the same and contain visible pictures. These simple steps lead to an organized and safe workspace with more accurate inventory and consistent performance.
Pest Control:
A pest control program is necessary for any fulfillment center. A typical indicator of a pest control program is a white border around the warehouse facility. You should also see traps throughout the building and upon entering. Make sure to ask about the pest control program, and if a report covering the last few months can be provided. This is especially important if you have a food grade product needing an FDA-registered fulfillment center.
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Culture:
One of the most overlooked areas when touring a fulfillment center is the culture fit. If you are going to select this fulfillment center as your partner, you want to make sure you align on culture and expectations. A bad culture is usually very apparent when you walk in and can feel the energy.
Talk to the team:
By the time you’re touring a facility, the fulfillment company should already know who you will be working with on a day-to-day basis. Make sure they introduce you to those team members, and ask questions. Understand their responsibilities, how they operate, and how they prefer to communicate (i.e. email, phone, etc). Trusting the team members handling your product is extremely important.
Expectations
Aligning expectations on response times, responsibilities, and escalation path is key. Knowing who you can go to when you have issues and who can make decisions will help you get fast resolutions.
Business Fit:
Understand how your business fits into the 3PL provider’s operations. Make sure to see the space and run through processes they will use to fulfill your products. Walk through a “day in the life” of your product, starting from the time the inventory hits the dock door, to the time it leaves on the carrier trucks, and every step in between. Ask questions about how relevant KPIs are met, such as inventory accuracy, order accuracy, order timeliness, and receiving timeliness.
Similar Clients:
While you certainly may not want your fulfillment provider working with a direct competitor, it is important for you to look for similar types of business. Look for indicators like similar product size, similar size SKU base, and similar pack-out processes. If they are successful with similar brands, this can give you confidence that they should be successful with yours.
Success Stories:
Discuss success stories during your tour to understand how they have grown and improved operations for customers like you. The ability to take a company through significant growth is always a good sign to know that a fulfillment company can not only handle your needs today, but also in the future.
Complications:
Be sure to discuss any issues, challenges, or complications that they see with your business. No process will be perfect at the start, so trying to predict the gaps upfront helps you build a better plan ahead of time.
Warehouse Technology:
Technology can be a major differentiator for fulfillment companies, and understanding how technology will work within your operations is another factor to pay attention to when touring a fulfillment center. Many fulfillment companies pride themselves on technology, but are not operationally strong. Others are operationally strong, but lack technology. Ensuring that you are selecting a fulfillment company that can meet your technology needs is important, and should be showcased during your tour.
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Warehouse Management System (WMS):
The Warehouse Management System (WMS) is the “brains” behind any warehouse. Knowing the system and how it is used is key to understanding the technology that drives production. Customers will often need to access this system to pull reporting, monitor inventory, and track shipments. Get a demo of this system and ensure it can meet your needs to drive your business. Look for details around reporting, lot control (if lotted items), and ease of use.
Automation:
Look for ways that the fulfillment company is using automation in their operations. If there is a significant amount of automation, make sure that the automation is flexible enough to handle your product. If there appears to be a lack of automation, work with them to understand the roadmap for automation and when it will be implemented.
Continuous Improvements:
A formalized Continuous Improvement for operations—and your program specifically—is the sign of a sophisticated 3PL. Working closely with your 3PL to find ways to improve efficiency and share in cost savings is paramount to a long-term relationship. Understanding what is driving costs in the fulfillment operations is important to know especially as you add or redesign products.
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Conclusion:
Before selecting any fulfillment company to handle your distribution, it is crucial to tour the facility. If the 3PL is not willing to give you a tour or allow you to visit, that can be a huge red flag. Understanding what to look for when you go into the fulfillment center will make for a productive and successful tour. Keep an eye out for cleanliness, organization, culture, business fit and technology.
Last Updated: Jul 22, 2024
