With the holiday peak season coming to a close and the new year approaching, many 3PLs may find their businesses longing for a short reprieve from the rapid pace and constant demand. However, if this year was any indication of what we can expect next, many won’t have time to pause before tackling the new year.
For third-party logistics (3PL) warehouses, the transition from holiday peak season to the new year can come with little time to plan and plot out the goals, objectives, and strategies for the upcoming year. As with many businesses, 3PLs can benefit from performing a retrospective on previous performance and overlaying the findings with a business roadmap and growth strategy.
Performing a retrospective of previous warehouse performance starts by looking at a critical time for the business (e.g., time of high-volume or another major event) and then asking some very basic questions:
This section will include things like order throughput records, time to productivity for new or temp labor, system benefits, positive customer feedback, etc.
This section may include things like customer losses, mis-picks or accuracy issues, increase in customer service contacts, system outages, labor shortages, etc.
This may include things like better dock scheduling for receiving products, added integrations with shopping carts and marketplaces to reduce manual order entry, implementing better quality control processes, automating warehouse processes with a new warehouse management system (WMS) technology, creating better communication processes between support and warehouse, and expanding temporary labor agency relationships.
This analysis should include performance metrics, employee-run programs, communications, customer experiences, processes, and systems experiences from across the entire organization. Performing this retrospective as a team can provide great insight into where opportunities exist for the business in the coming year, as well as key areas for improvement or optimization.
In 2021, 85% of 3PL warehouses grew their order volumes and 79% grew profitability, but those that had the highest growth (25%+) had very key hallmarks to their businesses across the verticals they serve, technology they implemented, and how they measure their business performance. With nearly 71% of 3PLs looking to acquire new customers in the coming year, annual planning will play a big role in the success of companies achieving their growth targets.
Start by asking and outlining key goals for your business, including target growth rate, number of new customers, order volumes, and profitability targets. This will provide a baseline that will feed into the roadmap for the coming year. You’ll need to identify any gaps you might have in supporting those objectives (e.g., technology, processes, people, etc.).
Once you have your targets, then you can think about scenarios and stretch goals. Questions to ask your team:
While you could ask many more questions to understand the changes needed for your business, these questions will provide a foundation for annual planning and aligning actions with your annual targets.
As we wrap up the year, evaluating processes could represent a good start. Check out these checklists to review with your business to drive efficiency and optimization:
Many companies saw tremendous success last year. Know where you stand versus your competitors and what you need to do to accomplish your future objectives will play a pivotal role in driving growth and profitability.
Learn more about the plans your competitors and other 3PL warehouses have for 2022 by reviewing the Third-Party Logistics Warehouse Benchmark Report.