Successful 3PL Relationships Managing With Service Level Agreements & Key Performance Indicators

Joe Lynch

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A good 3rd party logistics provider can help companies save money and improved supply chain effectiveness. A bad 3PL can cost a companys money, effectiveness and even customers. The key is selecting the right 3PL and then using a service level agreement and key performance indicators to manage the 3PL. A service level agreement used in conjunction with key performance indicators will both the customer and 3PL to objectively measure progress.

The webinar will be delivered in 3 sections:

1) Review of 3PL selection criteria

2) Service level agreement (SLA) definition & development and

3) Key performance indicators (KPI) and scorecards

3PL Selection Criteria : To get the most out of a 3PL, shippers need to understand the roles and responsibilities of a 3PL. The selection criteria will vary depending on the shippers needs. In the webinar, there will be a review of the selection criteria. Selection criteria include: financial stability, specialization, customers, asset based vs. non-asset based, operational capability, technology, people, culture, reputation, etc.

Service Level Agreements : A service-level agreement (SLA) is a part of a service contract where a service is formally defined. The SLA specifies, in measurable terms, what services the logistics provider will furnish. An SLA also defines the roles of responsibilities of both the 3PL and the customer.

Key Performance Indicators vs. Metrics : A metric is any standard of measurement (number of carriers, inventory turns, average shipment weight, etc.). A Key Performance Indicator (KPI) is a metric that you have chosen that will give an indication of your performance and can be used as a driver for improvement. In general it's preferred to just choose a few KPIs (say 3 or 4) to focus on. This means that while all KPIs are metrics, not all metrics are KPIs. Only the most important metrics can grow up to become KPIs. Using service level agreements along with key performance properly will enable a shipper to drive continuous improvement in their supply chain. SLAs and KPIs will also ensure that agreed to, objective measurements are being used to judge 3PL performance. An SLA along with the proper KPIs will also allow shippers to create incentives, disincentives and exit clauses based on performance.

Course Objective

  • The benefits of using service level agreements and key performance indicators for managing 3PLs.
  • Appropriate 3PL selection criteria for selecting a 3PL.  
  • Definition and importance of service level agreements
  • How to develop a service level agreement with a 3PL.
  • Why key performance indicators are a required component of an effective service level agreement.
  • Understand how objective measurement drive continuous improvements

Course Outline

  • 3PL selection criteria
  • 3PL roles and responsibilities
  • How to measure and manage 3PL relationships
  • Service level agreements defined
  • Developing a service level agreement
  • Selecting the right key performance indicators.
  • Driving continuous improvement in logistics and transportation function. 

Target Audience

  • Purchasing agents
  • Logistics managers
  • Operations managers
  • Finance and accounting managers
  • Supply chain managers
  • Supply chain consultants
  • Supply chain technology developers
  • Transportation sales people
  • Traffic managers
  • Shipping and receiving managers
  • Warehouse manager
  • 3PL Managers
  • Manufacturers, retailers, distributors and wholesalers who need a strategy for selecting, measuring and managing their 3rd party logistics providers (transportation, warehousing, logistics, etc..). 
  • The webinar will also be helpful to logistics and transportation companies.

Webinar Events
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Training CD-DVD

Physical CD-DVD of recorded session will be despatched after 72 hrs on completion of payment

Recorded video

Recorded video session

Speaker: Joe Lynch,

Joe Lynch is the founder of The Logistics of Logistics, a logistics training and consulting firm. Joe specializes in helping logistics and transportation companies grow their sales. Joe also works with manufacturers, retailers, distributors and wholesalers to select and manage their logistics providers (3PLs, brokers, carriers, etc.) Joes significant experience in logistics and supply chain has given him unique insights into the challenges and opportunities facing companies that outsource some or all of their transportation and logistics functions. Mr. Lynch is a frequent speaker and presenter at industry conferences. Joe also conducts dozens of webinars per year. Recent topics include: inbound logistics, automotive logistics, 3PL selection & implementation, service level agreements, managing with key performance indicators, 3PL sales strategy, shipping to/from Mexico, Food Safety, Latin America SC and LTL trends. Prior to founding The Logistics of Logistics, Joe was the General Manager of a non-asset based 3PL. Earlier in his career, Joe led a supply chain consultancy, which focused on the automotive sector. His consulting engagements included: value stream mapping, supply chain optimization, lean product development, module strategy, and quality improvement. Joe started his career as an automotive engineer and eventually rose to program launch manager for vehicles built in Thailand and China. He has a Bachelor of Business Administration and from Cleary University. Joe also earned a Master of Arts in Education from the University of Michigan.

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