Johnson Stephens Consulting assisted our client, the leading manufacturer and wholesaler of paper craft and party supplies to retailers such as Wal-Mart, with the selection of a third party logistics provider. At the start of the project, their 750,000 square feet distribution center located in the Midwest was at capacity for storage and did not provide an obvious growth path. The distribution center contained a combination of racked and bulk floor stack storage, utilized Manhattan Associates PkMS for its 11,300 total SKUs, and operated with one shift. In addition, our client acknowledged that some of its current work methods were not optimal. The organized labor workforce situation was also unstable. Their objective was to find a logistics partner who could migrate their distribution operation into a different space, create a more efficient layout, and operate in a manner which minimizes labor while meeting the requirements of the customers.
After tours with the finalists of a selected client facility, Johnson Stephens developed a decision support matrix which examined pricing and subjectively evaluated 3PLs based on labor measurement, average receipt-to-put-away time, inventory accuracy, on time loading, associate training, transition management, continuous improvement, and IT capabilities. A weighted sorting exercise was conducted based upon these factors. From seven major 3PLs, EXEL was selected as best meeting the needs of the client. JSC participated in negotiating and finalizing the 3PL contract on our client’s behalf.
How We Did It
Following an initial project orientation meeting to review objectives and identify key milestone dates, Johnson Stephens collected volume and descriptive data about shipping processes and requirements, conducted interviews with our client’s management team to understand what types of pricing structure and risk management arrangement they desired to have with a future 3PL partner. Johnson Stephens assessed the 3PL market to assemble a set of potential providers with the presence and service to potentially serve as our client’s partner and facilitated a Request for Proposal to document the specific requirements for each distribution function. Johnson Stephens created a 3PL Bid Summary to narrow the field to three 3PL providers.