Logistics Industry November 9, 2010
At Your 3PL Partner's Facility
What a pain in the proverbial behind... that dreaded call from your customer letting you know that there's an "issue" or "problem" with your companies product and that you're going to have to fix it... and of course, it needs to be done right away. As Murphy's Law would have it, there are orders pending and empty shelves mean lost revenue. The pressure is on and you're not sure how to react. What to do, what to do??? The answer may be as simple as picking up your phone and calling the 3PL company that you deal with.
When you're looking at choosing a 3PL partner, it is crucial to find out whether they can help you out with the little problems that come along from time to time (and the big ones that blow up all of a sudden too!). In my experience, the difference between a great 3PL and a good one is the ability to handle the problems that make you look bad and turn them into solutions that make you look good to your customers. Every problem you're presented with is an opportunity to shine and hopefully your 3PL can make this happen for you.
There are many types of rework that your third party logistics partner can perform for you. Here are a few:
i) Missing Labels - common in Canada when a company forgets that there are legal requirements around bilingual labels
ii) Missing Parts - your product has arrived without something as simple as a battery or screw inside of it. It may sound like easy work but do you really want to open up thousands of boxes and do this project yourself?
iii) Co-packing - the VP Sales has worked a great deal with a major retailer like Canadian Tire or Wal-Mart to do a 2 for 1 deal on a couple of older sku's that you have. Now who will execute the shrink wrapping or strapping of the products?
iv) Display Units - the product and display units have arrived at your 3PL and you find out that their not equipped to do this for you. Think about the time wasted and money spent shifting all of your product and display units over to someone who can do the job for you and what about the compliance issues you may face?
There are many more opportunities to work with your logistics partner and have them help you out when it comes to rework but we won't go into those now. What I will tell you about is how this process works and how you'll likely pay for it.
As the 3PL doing the work for you, here is how they will likely go about planning the project and figuring out their cost:
a) Receiving / de-stuffing rates
b) Time: straight # of hours worked on the project x labour rate
c) Unusual equipment needed or used
d) Extra supplies such as shrink wrap / pallets
f) Space needed to do the rework project in
g) Transportation needs
At McKenna Logistics Centres, when it comes to rework and special projects, we have our priorities / goals straight. Our goals are simple:
1) Turn the job around as quickly as possible and do it on budget
2) Do the job once and do it right - quality is key
3) Get the facts; plan your work and work your plan
4) Make sure the customer is kept informed along the way
Once the job is complete, total customer satisfaction is what we want to achieve.
Finally, you will find that rework projects will usually be a little more costly than something that you have the ability to plan for. However, as turn around time and getting the product back to market fast is you're biggest concern (you want to keep your customers happy after all), the price that you pay to your 3PL is well worth it as long as the job is done quickly and correct! Actually, when you compare the costs associated with sending a product back to China to get reworked, it's a definite bargain!