An optimized supply chain is a competitive advantage and an increasing number of companies are realizing how they can achieve this with a 3PL provider. According to an IBIS World industry report, logistics outsourcing has grown at an average rate of 5.2% from 2015-2020. The rapid growth in e-commerce and new technologies has created high competition among suppliers causing them to turn to the help of 3PLs for logistics management. There are several benefits in addition to gaining a competitive advantage that a logistics partner can offer.
Time Savings - Being Able to Focus on Your Core Business
One of the greatest benefits of outsourcing logistics operations to a logistics provider (3PL) is the time it frees up for companies to focus on their core business. When it comes to business operations, a company’s time is better spent on product development and marketing versus order fulfillment and transportation management. Companies that have outsourced logistics to a 3PL can focus on growing their company knowing that their supply chain management is being handled by professionals.
Logistics Industry Expertise and Advanced Technology
A logistics service provider vastly expands the expertise of a company’s team. A 3PL acts as an extension of their clients’ business and can grant them access to a wealth of industry knowledge and technology. It is beneficial to companies to have logistics experts on their team when it comes to developing strategy or resolving supply chain issues. 3PL partnerships eliminate having to handle complexities like retail compliance requirements and managing expensive real estate. Logistics experts have advanced technology, efficient processes, and strategic recommendations that can improve their clients’ supply chain management.
Scalability and Expansion Opportunity
When outsourcing inventory management to a 3PL, opportunities to scale and grow are at hand. Many ecommerce businesses start by handling their own supply chain operation. However, as a business grows, managing activities like order fulfillment, transportation coordination, and reverse logistics become increasingly complex. The need to scale and expand is a scenario when outsourcing logistics to a 3PL can provide great value. Another scenario is during peak selling seasons. A company may have a high demand for a short period of the year and not want to invest in real estate and staffing to meet the demand for that short period. A 3PL can provide the resources that a business needs to meet demand and avoid missing sales. Logistics outsourcing is a good long-term plan for companies to develop a comprehensive supply chain strategy that is flexible and reliable.
Access a Network of Supply Chain Solutions
A 3PL partnership can give businesses connections to a vast network of supply chain solutions. Most 3PLs have facilities in a number of strategic locations or have business partnerships that can provide needed services in various locations. They often have connections with transportation companies, packaging companies, industrial real estate companies, market data analysis companies, and more. An experienced 3PL can connect clients with a reputable company for nearly any supply chain service they may need. A network becomes a valuable benefit as a business grows because they can place their inventory in multiple warehouse locations that best serve their customer base. Access to additional resources such as data analysis, warehouse space, and labor is essential to expand logistics operations.
Improved Customer Satisfaction
Consumer expectations are high when it comes to fast shipping. The bar has been raised by e-commerce giants like Amazon, causing consumers to expect packages on their doorstep within two days. Outsourcing logistics to experts and using their technology, proven processes, and strategic facility locations ensures the customer’s expectations are met. A business can lose sales if a customer is unhappy with the estimated shipping time. They will simply find a similar product that will arrive sooner. In addition to meeting customer shipping expectations, outsourcing to a 3PL allows businesses to allocate more time toward developing top-quality products and five-star customer service, which contribute heavily toward customer satisfaction.
Efficiency and Cost Savings
When it comes to 3PLs, logistics operations are their core competency. They work to continuously improve upon their processes and offer cost-effective supply chain solutions. Partnering with a 3PL ensures efficiency without the investment of developing and managing an in-house logistics operation. 3PLs lower logistics costs for their clients by removing the need for overhead, facilities, equipment, technology, and labor. Outsourcing to experts that have developed efficient processes helps companies save money by eliminating wastes such as time and errors. 3PLs can also source additional services and products for their clients at lower prices through relationships with other companies in the industry, such as transportation and packaging. They typically have access to volume discounts as well because they are procuring for many clients who often need the same materials.
Risk Management and Agility
The recent pandemic has shown how important it is to have an agile supply chain. Health and safety orders caused a significant number of brick-and-mortar sales to shift to e-commerce. This led to a considerable spike in demand for Amazon FBA. Sellers relying on FBA to fulfill their orders were hit with processing delays and storage limits in fulfillment centers. Many sellers started looking for alternatives to FBA, but unfortunately, lost out on sales during the process. Logistics outsourcing can prevent issues within the supply chain through flexibility, stability, and visibility. Businesses using a 3PL warehouse have options when it comes to the management of their inventory and can shift operations in response to problems and opportunities.
Benefits of Partnering with Beyond Warehousing
Beyond Warehousing is a values-based full-service 3PL warehouse headquartered in the Kansas City Metro area. Our central location provides advantageous supply chain optimization opportunities. We currently have a 270,000 sq. ft. warehouse in Edgerton, Kansas located less than one mile from the BNSF intermodal facility and within a heavy-haul corridor. The Beyond leadership team combines over 30 years of experience at the leading e-commerce company in the world, Amazon, and over 90 years of experience in the logistics industry. With our sister companies in the NorthPoint family, we provide an end-to-end supply chain solution. Our understanding of foreign markets and international trade is built upon years of operation across thousands of global ports. Our values orientation, commitment to data-driven decision-making, and relentless drive to optimize and innovate truly differentiate us in the marketplace. To learn more about Beyond Warehousing and how we can add value to your supply chain, contact our team for a no-pressure conversation about your needs.