When sourcing a third-party logistics (3PL) provider, it’s critical to choose a partner that stands out from the competition. Though you may not manage your distribution center directly, your name is still on the products you sell. Inefficient distribution centers lead to unhappy customers and ultimately, a loss for your company.
But some businesses are missing the countless benefits of working with the right 3PL. As experts in the supply chain and logistics industries, third-party logistics providers can greatly improve efficiencies within your distribution strategy including fulfillment and delivery. In this post, we’ll discuss the benefits working with a reliable 3PL can have on your business.
What does a 3PL do?
3PL is a service that allows companies to outsource operational logistics from warehousing, all the way through to delivery, and ultimately enables companies to focus on other parts of their business.
Third-party logistics companies provide any number of services having to do with the logistics of the supply chain. This includes transportation, warehousing, picking and packing, inventory forecasting, order fulfillment, packaging, and freight forwarding.
3PLs and the benefits to your business
Third-party logistics partners have the ability to impact all areas of your supply chain business, which is why partnering with the right 3PL is critical to your business’s success. Here are three key areas to note:
Outsourcing part of your supply chain functions to a 3PL provider can significantly increase your company’s savings potential.
When you work with a 3PL, you can consolidate the costs and management time of renting warehouse space, training and deploying a material handling team, scheduling a fulfillment team, maintaining equipment, and ensuring inventory accuracy. Outsourcing your back-end work to a 3PL provider also means you won’t be responsible for liabilities, such as damaged inventory, broken equipment, and accidents that happen in the fulfillment center or when transporting inventory. Your 3PL provider will also be responsible for managing other operating costs like site upkeep, certifications, and IT systems.
You also reap the added benefits of working with logistics providers that have an extensive network of partners and relationships to negotiate the best prices and better discounts, minimizing your business’s operating expenses.
When your business grows, your 3PL and their network are there to accommodate your expansion. Rather than investing in warehouse space and technology based on uncertain forecasts (the Covid-19 pandemic underscored what most of us already know — supply chain planning is incredibly challenging), a 3PL partner can help you scale space, labor, technology, and transportation in accordance with market fluctuations. Using the latest in supply chain management software, third-party logistics partners can leverage years of industry expertise to your advantage, whether it is continuously fine-tuning logistics processes or swiftly meeting sudden warehouse space demand. These partners can also work to expand into new markets and regions with limited roadblocks, seamlessly supporting your business’s growth.
3PL providers have the resources and relationships to make adjustments and improvements to each link in your supply chain. Optimizing different facets of your business with your logistics partner allows companies to figure out what processes are working and where inefficiencies may exist. Utilizing supply chain management technologies provides deeper into the most cost-effective shippers, best routes, performance data, and much more. Analyzing and monitoring best practices throughout your business helps eliminate waste (of time, money, and positions), as well as streamlines your current practices. With the right 3PL, your business will continue to improve processes throughout your supply chain.
Takeaway: WSI is here to help
WSI’s innovative logistics services help customers increase efficiency, shorten lead times, deliver more reliable performance, and minimize costs. Through the application of Lean operating principles, we have created a culture of continuous improvement that directly benefits our customers. With over 50 years of experience, we help our customers succeed with reliable, integrated third-party logistics services. That passion for excellence has built WSI into one of the nation’s largest privately held 3PL solution providers with an exceptionally high client retention rate. Want to find out more. Shoot us an email.