A great product isn’t worth much if you can’t get it to customers on time. When your warehouse and logistics operations aren’t running optimally, you risk running out of products, slow shipping, and other issues when fulfilling orders. That leads to unhappy customers and bad reviews.
The problem is that supply chain optimization is a process that’s hard to get right. That’s why so many companies outsource this process to 3PL companies. Believe it or not, 86% of Fortune 500 companies use 3PL services.
So, what can a 3PL service offer your company? Let’s look at the benefits you’ll see below.
Save Time
It’s not easy to run a logistics operation. It may be possible to do well when you’re small. But as your company grows and you store more inventory and ship more products, you may find yourself overwhelmed with how much work it takes to manage things.
Working with an outsourced partner will help you save time. Instead of building a large team to manage a growing business, you can rely on your 3PL partner to handle much of the logistics of your business.
As a result, you can spend more time on other tasks to help grow your company. Simply tell your 3PL partner your needs, send them customer orders, and trust them to handle your inventory management and get products to customers promptly.
Reduce Cost
Although it is true that you will have additional costs when you outsource your logistics operations, that doesn’t mean you’ll pay more than you would if doing things in-house. In many cases, you’ll save money and free up capital to spend on other internal operations.
For example, outsourcing to a 3PL logistics provider may:
- Remove the need to own or rent additional warehouse space
- Save money shipping products
- Reduce staff needed to find and ship products
- Avoid unexpected cost increases due to the need to scale
These cost efficiency reductions can drastically reduce your logistics costs and, in many cases, exceed the amount you pay to outsource the service.
Gain More Experience
From inventory management to shipping logistics, there is a lot of information you must get right to build an efficient supply chain. Each puzzle piece requires expertise you may not have on your own.
If you handle your supply chain in-house, this means you may need to hire several people to take on the role. Although you can hire consultants to help with the initial process, you still need a team available to help with the day-to-day operations.
A 3PL provider will have all the help you need. They will have experts available to help with every part of the process. You won’t need to worry about having expertise available when you want to expand your operation or invest in a streamlined operation.
Scale Faster
It’s not easy to scale faster when you handle your logistics operations in-house. You build out a large facility to get to that point. But what happens if you need to keep growing and don’t have enough space or employees?
This can make scaling fast extremely hard. You can’t keep up with demand and may end up falling behind. Ultimately, this ends up with disappointed customers.
You can ask your 3PL partner what kind of scale you can expect. If you work with a large provider, they can likely scale with you as much as you need. This reduces the time and energy needed to build a larger supply chain.
Access New Markets
Setting up a business in your home country’s market probably won’t be too challenging. You have access to reliable shipping services to do this and don’t need infrastructure elsewhere. The biggest thing you may need is additional warehouses to speed up shipping.
However, things get much more complicated when you want to expand internationally. Each country has different laws regarding product businesses and importing products. It takes a lot of time to do this on your own.
Experienced logistics companies already have this infrastructure set up. You can count on your partner to help you expand internationally with the least hassle possible. This means you can continue growing your business without setting up expensive infrastructure overseas and with fewer legal headaches.
Get Better Reports
A logistics operation requires a lot of management to make work right. You need the right inventory level, an optimized warehouse system, fast shipping, and many other things to get right.
It’s hard to pull this off without data. Your supply chain will inform the rest of your business about some of the most important parts of it:
- Inventory reorder levels
- Customer returns
- Average order value
- Shipping speed
These are things you can learn to optimize. An experienced logistics partner will understand how to optimize for good numbers and help you understand how well your operation runs. You can use the reports you get from your 3PL partner to streamline the rest of your business and make more profit.
Provide Better Service
One risk you have when running your supply chain in-house is customer service. You may not have a team large enough to properly serve customers and ensure everything works when products make it to their destinations.
That leads to unhappy customers and returns. However, when you work with a logistics service, you can take advantage of their resources to better serve customers.
You get faster shipping, customer support personnel, and much more to keep customers happy. Doing this will improve risk mitigation by minimizing returns and legal issues from bad products.
Don’t Wait to Outsource Warehouse and Logistics Services
You already have a lot on your plate when running a product business. You do a lot to work on streamlined operations, but you still struggle to get enough done during the day.
One of the best ways to reduce some of the load is to outsource warehouse and logistics. Look at your 3PL service provider options to find a provider that helps you with supply chain optimization.
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