According to the 2015 3PL Selection and Contracting Report from eyefortransport, a 3PL’s contract renewal was affected by poor service, an alternative 3PL offering cheaper prices, and a breakdown in the professional relationship.
The dissatisfaction of a 3PL's performance over time can be a result in lost expectations. If the initial RFP did not request the right information in regards to potential scope creep, then both parties could be unequivocally frustrated at the end of the contract. This dissatisfaction can be traced to the origin of the outsourced relationship—in most cases, a request for proposal (RFP).
Drafting a good proposal document and asking the right RFP questions is essential to running a successful competitive bidding process and reducing the risk of selecting the wrong provider.
Here are 10 RFP questions to ask in your next logistics bid.
Value Proposition Questions
1. How does your company distinguish itself from other companies, and why is selection of your company the best decision we could make?
2. Describe your commitment to innovation. Specifically, how will you work with us to introduce new technologies or enhance our processes and optimize our total cost of doing business together?
Operating Philosophy Questions
3. What is your operating/management philosophy?
4. What is your continuous improvement methodology? (I.e. Six-Sigma, TQM, etc.)
5. Describe why your organization believes it is uniquely suited to provide the above- mentioned services to (insert RFP customer name here).
6. How does your company align with our company (values, culture, etc.)?
Pricing/Risk Management Related Questions
7. What is your company's general approach to risk management? What measures does your company take to minimize the probability and impact of supply chain disruptions?
8. Please describe your approaches to risk sharing (e.g. gain/pain share programs) and provide examples of different approaches.
Transition/Human Resource Questions
9. What is your typical implementation timeline for a project of similar scope?
10. What is your company's philosophy for obtaining and managing labor? For instance, do you prefer to hire and manage full-time employees? Part-Time/Temporary Employees? A mix? How do you determine labor rates for your employees?