When opportunity blooms, a shipper can go down one of several roads in choosing how to approach supply chain management. Some may choose to start from a lowly square one, tallying up the many costs, capital requirements, and risks ahead of their undertaking, and laboriously stacking all of those burdens on top of their initial business operation. But what if that shipper could hit the ground running? With a tried and true expert ally prepared to take on all of those secondary yet crucial aspects of the shipper’s operation, how much more quickly and effectively could that shipper penetrate the market? Outsourcing the order fulfillment process to a third party logistics provider, or 3PL, has some critical advantages. Here are some ways in which these efficiencies come to light.
- Focus on Core Competencies - A company that finds itself on the rise is also suddenly going to find itself unraveling a much longer list of vitally pressing tasks. During these growing pains, resources are often spread thin. This not only disrupts the budget, but the labor force as well. Staff members who have been trained to be studiously effective at one particular role may be detracted by new training and new activities that disrupt a cycle that has otherwise proven to work. Outsourcing logistics functions allows the heart of one's business to keep pumping at a steady pace, unruffled by the newfound weight of a growing company.
- Eliminate Overhead - Landing a heavy contract can be a major breakthrough for a growing company, but one must be careful not to be crushed beneath this success. Ample warehousing space, clean facilities, and other necessary requirements may mean extreme overhead for a shipper. Buying into one's own facilities is an option, but have in mind that logistics operations don't merely begin and end with a bunch of racks in a warehouse. Major renovations are often necessary to meet safety standards, furnish office areas, install utilities, and maintain very expensive warehousing equipment. These order fulfillment and ecommerce hurdles can become a money pit for a shipper, but for the right 3pl logistics outsourcing partner, this is business-as-usual.
- Offer Operational Oversight - Managing one's operations does not simply mean completing the processes involved. It also means monitoring, recording, reporting, and communicating the data and status updates associated with said processes. An advanced Warehouse Management System (WMS) and Transportation Management System (TMS) offer sharp advantages to a shipper in the way of responsiveness and oversight. Visibility is an important factor in outsourcing one's shipping, and modern technological advancements have helped to make this factor a painless one. And once more, the overhead and maintenance of such technologies is nothing to slouch at. A cutting edge logistics outsourcing partner will give a shipper the eye in the sky necessary to remain involved in the process from start to finish.
- Employ Responsive Staffing - Some products ship hot in the Spring time. Others in the Fall. Some even see sudden surges at random intervals throughout the year. Calling an audible and adjusting for these changing tides is what makes the difference between a functional operation and an efficient operation. Outsourcing allows a shipper to negate these concerns and leave it all to a logistics partner that will have the staff and capability to keep this balance year round.
- Mitigate Risk - When a shipper hands off their operation to an outsourcer, not only are the tasks, costs, requirements, and overhead lifted from the shipper's shoulders, but a certain degree of accountability as well. Through this agreement, the outsourcing partner assures the shipper that if one step goes awry along the supply chain, the logistics provider will own those associated costs. In an industry as nuanced and complex as logistics, it's valuable to have a partner who will take on the inherent risks of warehousing, packaging, and shipping, and is prepared to handle these situations with industry grace and experience.
All of these are clutch reasons to consider outsourcing one’s logistics to a 3PL, but really it’s the full package of these capabilities and expertise that generate a multiplier effect in value. A rookie can be trained, but a solid 3PL knows the supply chain game and is willing to play for your team.
