Warehousing and distribution strategy is an increasingly critical aspect of business.
Developing the right strategy alongside a 3PL warehouse provider gives the outsourcer access to an entire gamut of supply chain & logistics expertise. For small startup companies looking to establish a presence in a strategic market or large companies looking to seize opportunity in new areas, and any others in between, third party logistics providers give options that allow businesses to scale efficiently.
Does it make sense for your business to outsource? Below are 5 key reasons to outsource warehousing & distribution to a 3PL provider.
Understanding Your Options for Outsourced Warehousing & Distribution.
Utilizing a 3PL distribution provider allows you the flexibility to set up and scale your distribution model as business demands shift. You can more easily grow into new markets that allow you to service new and diverse customer bases.
Here are three examples of flexibility from outsourcing:
A 3PL will provide a variety of value-added activities, such as:
Leveraging a third-party logistics provider for their operational process expertise, and know-how within your industry are strategic advantages realized by outsourcing. Outsourcing reduces your costs, drives up your efficiency and allows you to focus on your core business, as a 3PL provider will:
Warehouse Management Systems (WMS), Transportation Management Systems (TMS), Radio Frequency Identification (RFID) and Electronic Data Interchange (EDI) integration capabilities are all technology solutions that add supply chain visibility & connectivity, create efficiency and streamline supply chain processes. Large distributors often provide barriers to small or less sophisticated companies due to data and information transmission requirements. The big box retailers of the world no longer have to be off-limits for companies of any size.
Powerful WMS and TMS capabilities can add huge value to your company. These systems allow for real-time access to detailed inventory information and allow you to forecast upcoming trends. Leveraging a 3PL that has strong technological capabilities allows you to leverage their systems and expertise to improve logistical processes. Taking it to the next level – integrating supply chain information into your own business systems provides larger scale insights to how your business is ultimately serving your customer.
Cost savings can be realized in many ways, however the most common of which involves process and people.
A 3PL provider gives you ability to easily forecast the landed cost of each of your products and account for this in your sales process. This is real example of how a 3PL provides cost savings.
A fully integrated 3PL warehousing and distribution strategy allows you to utilize an expert to manage your supply chain. A 3PL provider should be able to provide a road map to how you can most effectively build and maintain your supply chain. The provider should be rooted in providing flexible solutions that fit your strategy, technology that allows you to scale efficiently, and process development to drive efficiency and cost reduction, and have the fiscal sense to help you maximize your transportation dollar. Contact us to learn more about options for outsourcing warehousing and distribution.
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