Every business knows that consumers want what they want, and they want it now. Recent supply chain disruptions have been a huge wake-up call that perhaps the old, direct way of in-house supply chain management is not as effective as it used to be.
The disruptions supercharged supply chain outsourcing to 3PL providers. Business leaders began to understand that perhaps a professional supply chain management company could keep the business working more smoothly than they could with in-house resources. A good 3PL provider has the infrastructure, staff, technology, and expertise to flex with market changes.
The global 3PL market amounted to about $1 trillion in 2020, and analysts expect it to reach $1.75 trillion by 2026. The statistics indicate that companies that outsource generally find it worth the investment. Here are a few reasons:
1. Increasingly Complex Logistics Operations
Logistics today include elements that can have tremendous consequences if ignored. Cybersecurity, visibility into the complete product lifecycle, and actionable data are now essential to a smoothly operating supply chain.
When one or more of these elements is antiquated or vulnerable, it has a domino effect that echoes down the supply chain to the customer. It is a daunting task to provide all the elements of effective supply chain management and everything it takes to produce a product. As a result, companies are going to professionals with the infrastructure, technology, security, staffing, and facilities to manage their supply chain from end to end effectively.
Internal supply chain operations are limited because they are not the company’s core business. The primary business is producing and marketing a product. When the market changes, it is difficult for internal systems to respond quickly and cost-effectively.
A 3PL provider’s role is to provide all the elements needed to keep a supply chain running smoothly. With the infrastructure in place, adding another client or expanding a particular part of the business is easy. When a business needs to grow, 3PL providers can respond quickly.
3. Advanced Technology
Think about eCommerce. It rests on a technology platform that enables customers to order products conveniently. Consider extensive warehouse facilities. Without RFID, barcode technology, and robust warehouse management software to track products, parts, and equipment, how does a business know what’s on all those stacked pallets?
To be competitive in their core business, 3PL providers must keep the latest technology available to current and incoming customers. They enjoy economies of scale and can provide this infrastructure cost-effectively. A manufacturer’s core business is the product, so supply chain technology may lag compared to 3PL providers.
4. Intelligent Data
How do you know how many products to produce or how many raw materials, parts, or products to order if you can’t see what you have? If you don’t know how fast products are selling, how can you know what you need to produce? Having the latest data collection systems available gives you the intelligence you need to make smart decisions about your business.
Having a 3PL partner to manage every piece of your supply chain and give you the data for complete visibility into your operations puts powerful tools in your hands. Without the burden of coordinating logistics, you have the time and energy to look creatively at the market and the direction you want your business to go.
5. Operational Cost Reduction
Many times, outsourcing to a 3PL partner not only saves you money but makes your operation more efficient. The bonus is that the burden of providing logistics is off your shoulders, and you can concentrate on the products and services that expand your business.
Your product is your business, not distribution, so you don’t enjoy the economies of scale a dedicated 3PL partner offers. Providing all the infrastructure, overhead, and staffing needed to fund an in-house operation can adversely affect your profitability.
6. Deep Resources
Your 3PL partner is in the supply chain and logistics business. They know the nuances and the ins and outs that might not be your focus. With a 3PL partner, you immediately gain the expertise, knowledge, and resources they have built over the years. A 3PL partner just might be the competitive edge you need to hold your own against larger rival businesses. consider outsourcing you logistics today!
7. Risk Reduction
Every business has risks, and part of good business practices is limiting those risks as much as possible. When you have a 3PL partner, you gain heightened visibility, enabling you to see vulnerable areas and reduce their impact.
3PL providers typically have robust security in place to resist cybersecurity attacks and the ability to help you shorten lead times, bring in another layer of suppliers, keep a consistent level of inventory, and deal with any compliance issues.
Relief Is Closer Than You Think
When you’re looking for the ultimate in reliability from a 3PL provider, look no further than WSI Supply Chain Solutions. From our first small warehouse in 1966, we now operate over 14 million square feet of operational facilities throughout the U.S.
We offer a full complement of 3PL services, including eCommerce fulfillment; retail logistics; pick, pack and ship; and fulfillment kitting services. Call us at 920-663-4707, or reach out online to explore how WSI’s 3PL services can give your business a competitive edge.