6 Essential Steps for Effectively Managing 3PL Relationships

6 Essential Steps for Effectively Managing 3PL RelationshipsEach year after I return from my Christmas / New Year break I spend the first couple of weeks getting myself organised for the year ahead. I use this time to plan how I am going to manage the numerous 3PL service providers that I am responsible for. This annual planning process is critical if you want to develop a disciplined supplier management process but more importantly it provides the framework for effectively managing my 3PL relationships and driving their performance from both a key performance indicator (KPI) and a cost perspective.

Below you will find a more detailed explanation of each of the activities but as a starting point here is my to do list for the start of the year.

  1. Review contract register to understand if there are any agreements due for review or renewal in the next 12 months
  2. Create a draft schedule of meetings and other key activities
  3. Schedule the dates of all meetings and key activities into calendar and send meeting requests to the required participants
  4. Create reminders in calendar or task list as prompt to check that the service provider has submitted their data and reports as per the agreed schedule
  5. Schedule time in calendar prior to the meeting to review the service providers current months data and reports and the minutes and action items from the previous month’s meeting and prepare for the upcoming meeting
  6. Schedule time in calendar immediately after the meeting to review notes and distribute the minutes and action items from the recently completed meeting

Review contract register

The first thing I do each year is review my contract register.

Given I manage many third party logistics service providers in several different countries, the contract register gives me a snapshot of the various agreements that I am responsible for.

By reviewing my contract register at the start of the year it reminds me of any agreements that might be due for review or renewal. The contract register also highlights if there are any option clauses that are becoming  due and shows the timeline for which the option needs to be exercised.

It is important to understand the requirements and the timeline for any agreement that has an option clause. You don’t want to miss an opportunity to renew or extend a relationship that is working well. In the case of relationships that are not going so well you also don’t want to miss an opportunity to terminate or renegotiate the agreement because it has been automatically extended as a result of an option clause that you were not aware of or did not act upon.

For any agreement where some action is required I will add this to the draft meeting / activity planner for the year.

Create a draft schedule of meetings and other key activities

Completing the draft meeting / activity schedule is the key to planning my year and ensures that I don’t miss any key events

To capture this information I have developed a Microsoft Excel spreadsheet – a copy of my meeting / activity planner template can be downloaded HERE

The first time I undertook this process it was a very tedious exercise but once you have done it once it forms the basis for each of the following years.

I start by listing any known public holidays and any personal leave I might be planning – no point in scheduling a meeting or activity on a public holiday or while you are on holidays!

If you are like me and dealing with  service providers multiple countries make sure that you capture the public holidays in all of the relevant countries – a good resource for finding a list of public holidays in any country can be found at www.officeholidays.com I also check with my logistics service providers to ensure that there are no other days that they will not be operating.

Next I add all of the regular review meetings that I am planning to have with my service providers – information to capture in your list should include the date, the time, meeting / activity types and the location of the meeting.  Acopy of my meeting / activity planner template  with all  of the  information I capture  can be downloaded HERE

The meeting type could be either a weekly operational review, a monthly performance review or a quarterly or annual strategic review.

For weekly operational or monthly performance reviews I like to try and schedule then at the same time each week or month. For example – at 10am each Thursday or on at 2pm on the 3rd Tuesday of each Month

Sample of MS Outlook recurring event

Sample of MS Outlook recurring event

Whilst the most effective meetings will always occur when all participants meet “face to face” having all participants in the same location is not always possible these days. The use of internet based teleconferencing and video conferencing services such as Skype , GoTo Meeting and Zoom means that you can still be face to face but just not necessarily in the same room.

These days most of my meetings are conducted “virtually” using one of the above services.

After that I add in any other key activities or events. Key activities or events could include such things as the planned date for your annual stock take  / count, industry events or any personal development conferences that you plan to attend

And finally I add in my contract review dates. Adding the contract review dates to this list will ensure that you don’t miss an opportunity to renew or review an agreement.

Once all mettings and activities have been added to my schedule I then sort the spreadsheet in date order – this gives me a chronological list what is on my plate for the next 12 months.

It will also highlight any conflicts or duplication that you need to adjust before adding all of this info information into your calendar.

Schedule the dates of all meetings and key events in calendar and send out meeting requests

The next step in my annual planning process is to add all the meetings and activities that I have collated in my draft schedule into my calendar.

I will assume that you are using an electronic calendar such as those that are part of the Microsoft or Apple suite of programs and are familiar with the basic functionality of these systems.

I personally use Microsoft Outlook and take advantage of the “Recurrence” function to schedule a series of meetings. If you are operating in multiple time zones you can also take advantage of the “Time Zones” feature to pick a different time zone to schedule your meeting. Another resource I always find useful for planning meetings , particularly those that have participants in multiple time zones, is the www.timeanddate.com website

Create reminders to check that service providers have submitted their data and reports on time

All effective 3PL service provider management processes should include:

  • A clearly defined set of key performance indicators (KPI),
  • An agreed reporting format
  • The raw data that is used to prepare the reports and determine if the KPI have been met is always provided – the raw data is important for a number of reasons:
    • Firstly it can be used to validate the service providers KPI calculations
    • Secondly, multiple periods can be combined and used for future analysis of activity, cost or performance
    • Thirdly, if necessary the combined data can form the basis of the information submitted to potential service providers when seeking an alternative solution
  • An agreed timeline for when the reports and data must will be supplied – reports and data should be provided at least two working days prior to the meeting so as they can be reviewed as part of your “pre-meeting” process prior to the upcoming meeting

Creating a reminder will be the trigger to follow up with the service provider if the data and reports have not been submitted as per the agree timeline. As per the approach to scheduling meetings I like to keep these dates consistent – for reporting I prefer to stipulate a set work day of each month e.g. the 7th workday of each month. Using work days as opposed to the 7th day of a month will exclude weekends and public holidays and will always ensure that the supplier has the same amount of time, and therefor no excuses, not to be able to prepare and submit their reports and data on time each month.

Although it is not expected at the time that the reports are submitted it is always my expectation at the review meeting that the service provider has proactively analysed the previous periods performance against the agreed KPI , they have determined the cause of any failures and have developed a corrective action plan to address the issues and to improve their performance in the future.

Schedule time in calendar to prepare for the meetings

“By failing to prepare, you are preparing to fail”

This famous quote by Benjamin Franklin is certainly relevant when developing an effective 3PL service provider management process.

I am sure I am no different to anyone else, most of my days are full of meetings and my to do list a mile long but the two things that have made a world of difference to my service provider management process has been intentionally scheduling a “meeting” with myself to prepare for any upcoming meeting and then ASAP after the meeting also scheduling some time with myself to review my notes and distribute the meeting minutes and action items to all participants.

The “pre-meeting” preparation time includes a review of the following and is one of the keys to effectively managing meetings with suppliers and service providers:

  • The previous meetings notes, minutes action items to ensure any outstanding tasks have been completed and following up on those that have not
  • The current months reports and identifying any items that need to be discussed at the upcoming meeting
  • Creating a list of other items to be discussed at the meeting – this list might include any specific issues that have occurred during the period, opportunities for improving existing processes, a request for a new process or service, forthcoming special projects or simply providing an update on what is happening with the business. In order to capture items for these discussions I have a section called “Discussion Points” in the Microsoft OneNote notebooks that I have set up for each service provider that I manage.

See below for more information Managing Supplier Relationships with Outlook and OneNote

Schedule time in calendar to review your notes and distribute minutes and action items from the meetings

As mentioned above, scheduling meetings with myself, has been a major breakthrough in the effectiveness of my supplier management process.

Immediately after each meeting I try to schedule at least one hour to review my notes and distribute the minutes and action items from each meeting. Not only is it easier to complete this task when the discussions are fresh in your mind but when you distribute the meeting minutes and action items soon after the meeting it also ensures that the there is no doubt about who is responsible for each action item and when it is due for completion. It also provides clarification to the action item owner of what is required and therefore removes any excuse for misunderstanding or misinterpreting the expectations.

For many years I have struggled with a combination of tools to manage the various tasks associated with managing service provider relationships. I have used Outlook for email and calendar functions and a combination of  excel spreadsheets and a word documents for capturing minutes and listing actions but it wasn’t until I became aware of the power of combining Outlook with Microsoft OneNote did I finally find a fully integrated system for managing supplier relationships.

In relation to distributing meeting notes and managing action items, the the key benefits of combining these two systems are briefly explained below:

  • Meeting notes and an attendee check list for a scheduled meeting can be compiled and stored in OneNote but initiated directly from the calendar entry in Outlook
  • Actions items can be added to the meeting notes in OneNote but stored and managed form the Task or To Do List in Outook
  • The meeting notes page can be emailed directly to the participants and any other contact


Sample of OneNote Meeting Notes and Actions Page

Sample of OneNote Meeting Notes and Actions Page

If you are interested in discovering the many other benefits of using Outlook and OneNote to manage supplier relationships you can download my FREE guide “Managing Supplier Relationships with Outlook and OneNote” by submitting your details below.


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