BEST PRACTICES IN THE SEARCH & SELECTION OF A 3PL PARTNER OPERATIONS SUMMIT 2013 Presenters: Rick Hall – VP, Client Success, FIFTH GEAR Matt Konkle – President, FIFTH GEAR

Making the Decision

Will outsourcing cost more than my in-house operations?

Cost Per Order Cost Per Contact Inbound / Outbound Freight Seasonality Operational Performance Fixed vs. Variable Model Scalability

Will I lose control of my business?

Clear Scope of Services Key Performance Indicators Standard Operating Procedures Joint Business Planning Reporting & Analysis Issue Resolution

Will my customers notice a difference?

Brand Strategy Target Customer Product Offering Sales Channels Marketing Plan Promotions Personalization Packaging Customer Service Competition

Focus your time on what will grow your business

Selecting a 3PL Partner

It’s about who you work with!

Financially Stable Expertise Track Record Reference Clients Ability to Scale Talent and Labor Pool Right location(s) Technology and Support

Make the right comparison

Technology Enablement Freight Management Data & Reporting Business Analysis Business Services Product Personalization Kitting / Assembly Value-add Processing Leadership Team Trained Workforce Facilities (locations, infrastructure) Standard Operating Procedures Safety & Compliance Flexibility Client Service Customer Care

Receiving Order Handling Pick & Pack Warehouse Storage Returns Account Management Clerical Support Technology Fees

One size does not fit all.

Making the Transition

Communication is critical

Executive Sponsor(s) Project Management Account Management Cross-Functional Dependencies Business Planning

Set Expectations Customer Data Open Order Backlog Hours of Operation Returns & Exchanges Issue Resolution Appeasements

Total SKUs Product Attributes Order Volumes Order Attributes Inventory Turnover Density / Velocity Service Level Agreements Seasonality

Know the Facts and Benchmark

Order Backlog Total SKUs Units Shipped Units Received Total Customers Total Vendors Open POs Order Demand Order Attributes

Average order value Lines per order Units per order Shipments per order Backorder rate Returns rate Declines / Holds

Minimize The Timeline

Data Conversion Integrations System Setup & Testing Payment Processing Vendor Management Customer Management Contact Center Training Warehouse Training Inventory Transfer Inbound receipts Initial Receiving Order Backlog Returns

Make ADJUSTMENTS

Thank You! Matt Konkle – President Rick Hall – VP, Client Success