3PL: The Best Solution You Can Have for Efficient Supply Chain Operations
Warehouse operations (3PL) aren’t just complicated but greatly challenging on an everyday basis owing to the multiple processes & risks involved in each process. Substantial experience and expertise are needed for logistical operations management. Many managers who manage logistics know very well how much benefit an effective and efficient warehouse & distribution system is for their businesses. To achieve a competitive edge in the market, they outsource their logistics operations to 3PL companies.
In this post, we have mentioned the top reasons to outsource the warehouse and distribution responsibilities to a reliable 3PL provider. Outsourcing to 3PL will offer more cost-effectiveness, flexibility, quicker order processing, and a great order fulfillment rate as compared to an in-house logistical solution.
Table of Contents
Complicated Processes –
The warehousing and distribution process looks very simple with just a few steps, including order receiving, assembling, picking and packing, and finally shipping. But in reality, there are many other processes involved such as inventory norms management, manpower, rules and regulations of the government, and rates of order fulfillment. All these processes need rich expertise, efficiency, accuracy to meet the customers’ expectations.
Locked-Up Capital –
At the same point, warehousing & distribution needs heavy investments in both infrastructure and manpower to bring perfection in each logistical process. This can be challenging for many companies/businesses as it needs a lot of resources and capital. The capital involved here is what we call the “Locked-up Capital”, which can be utilized for other things like acquisition or production of new products. 3PL providers know how complicated the warehouse operations are and this is why they work to provide you the most efficient and effective logistics services.
Over the last 20 years, many managers took advantage of an efficient and effective warehouse & distribution system for their businesses by hiring 3PL companies. The professionals take care of each and every step of overall supply chain operation with perfection and expertise.
Owing to the introduction of multiple advanced models such as Just in Time, cross-docking, offshore warehousing, inventory control, same-day delivery/return, and automation, the warehouse operations have turned too complex to manage. Managers have often discovered that the super-effective way to manage all these problems is to outsource the operations to the professional 3PL Companies rather than doing them all in-house.
The following is a list of 6 Convincing reasons why you should hire expert 3PL for your warehouse and distribution operations management
1) No Need of the Heavy Initial Investment –
Establishing a warehousing & distribution facility needs a large amount of capital. Warehouses usually feature plenty of space for which you need to pay high rent. Apart from this, the cost of heavy racking, IT infrastructure, material handling equipment, and other assets is also present. 3PL warehouse management companies have already invested in the latest facilities and equipment to manage everything with perfection. Over a long period of time, your business advantages as the 3PL logistics provider’s investment are shared across different customers.
2) Warehousing Cost Management –
Outsourcing to 3PL offers you greater flexibility to control and manage your warehousing & logistics costs. There is no need to pay for empty areas or your seasonal inventory for all 12 months. So, the biggest benefit of 3PL providers is that you pay only for what you utilize- nothing less and nothing more.
3) Distribution Cost Reduction –
3PL Companies combine consignments or volumes from multiple customers and use them to reduce per-unit rates. The rate advantage gets passed on to the clients thus reducing their distribution costs.
4) Observing Is Better Than Handling –
Outsourcing your warehouse & distribution tasks to 3PL provides you with more time & flexibility to observe your operations. It saves your efforts and time to pay attention to your core activities and to make strategic decisions that provide long-term benefits to your business.
5) Reduce Different Risks –
When you outsource your warehousing & distribution requirements partially or fully, you transfer some of the risks involved in the logistics operations to the 3PL companies. This might be the major plus point of hiring 3PL experts. Your 3PL logistics providers will be held accountable for any new or modified requirements, operational failures, and other similar things.
6) Use Value-Added Services –
Value-added services such as labeling, kitting, bundling, assembling, packing come with the service package that you take from your 3PL provider. It’s your choice whether you want to use these services or not but you are always given an option to add new value-added solutions as needed in the future.
The Takeaway –
The main concern of a reliable 3PL company is to focus on efficient warehousing & distribution solutions that meet the different requirements of their clients. With the extensive range of services provided by 3PL logistics providers, you have a great opportunity to use advanced technology.