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5 Benefits of Choosing a 3PL Distribution Centre

Third Party Logistics Benefits

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Change is the only constant in life. This statement holds even in supply chain management. As the world is accepting the new standard, several organisations are opting for  3PL Distribution centres for their warehousing solutions, and foregoing traditional warehousing practices. Having a well-planned warehouse management system is essential for an organisation as it bridges the gap between manufacturers and consumers by providing the required things at the right place, and at the right time in a cost-effective manner. Let us have a look at some of the benefits of choosing a third-party distribution centre.

Flexibility: Today’s highly competitive and continually changing markets require warehouses to have a great deal of flexibility. Depending on the organisation’s needs, third-party logistic providers enable access to thousands of carriers through a comprehensive logistics plan with the ability to scale labour, space and transportation. With these resources at hand, organisations can grow into new markets that will immensely increase their customer reach and create opportunities that support growth across the globe. Let us look at some of the ways of how 3PL provides flexibility:

  • A third party warehousing partner will understand how to synchronise inventory across all levels of the supply chain, and the logistic infrastructure will let the organisation scale its distribution and fulfilment with ease.
  • A 3PL will streamline the operational process by handling fluctuation in inventory, changing demands of consumers and change in the distribution centre.
  • Proper transportation is the root of warehouse management.  By using 3PL, organisations will have an aligned distribution network to overcome shifts in transportation.
Visibility

Expertise: The global market is getting tougher with each passing day. To tackle the increasing challenges, organisations need knowledgeable and experienced professionals. A third-party provider can provide the organisations with expertise in matters of geography, regulations, international compliance, import and export, documentation and much more. Having third party expertise can help organisations focus on core business initiatives.

warehouse Location
Cost Efficiency: Warehousing costs constitute a significant portion of total logistics costs. Being efficient in terms of time and cost can benefit the organisation in many ways. By using third party logistics, organisations can increase their efficiency and save money by:
  • Lowering Capital Investment, as organisations need not pay for warehouse, warehouse management system,  and technology.
  • By using third party logistics, organisations need not hire additional labour for warehouse management, which increases their efficiency and reduces cost.
  • Transportation is the root of any warehouse; the money spent on transportation is a high operational cost for the organisation. By using third-party logistics, organisations can save money without compromising efficiency.
Cost Efficient

Inventory Management: Managing storage, receipt, and outflow of products is the most basic and essential function of a warehouse. Third-party logistics can help organisations in better tracking of trends in sales, which can help them in making informed decisions. Traditional processes are not sufficient to manage the increasing complexities of demand with efficiency, which can lead to a delay in shipment, miscommunication and high turnaround times. Some of the ways in which 3PL enhances inventory management are:

  • 3PL employs enhanced inventory management solutions to manage all of the inventory in one system.
  • Quickly and accurately processes order requests.
  • Efficiently process the products that are returned by customers.
warehouse Location

Enables Business Growth and Market Expansion: The fundamental goal of any business is expansion and growth. To achieve this goal, organisations need flexibility in their sales rapidly so that they can get sales from anywhere without adding too many operational overheads. The third-party logistics in a supply chain management can enable growth by connecting channel of sales, ensuring communications, product details, pricing, inventory & order management, warehousing and shipping in a consistent manner. This can all lead to organisational success without the waiting process.

Order Management

Conclusion: 

Limiting the organisation’s growth due to the inability of handling warehouse is the biggest roadblock to organisational success. Organisations should consider 3PL as an evolutionary shift in traditional e-commerce. They have everything that an organisation needs to adapt, react and create a positive brand image. So that they can concentrate on their business in a better manner because brands are not just a business they are much more than that. As Jeff Bezos said “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.” To get started click here