They say change is the only constant in life, this statement holds true even in supply chain management. As the world is accepting the new normal, several organisations are opting for 3PL Distribution Centre for their warehousing solutions and foregoing traditional warehousing practices. Having a well-planned distribution management system is essential for an organisation as it abridges the gap between manufacturer and consumers, by providing the required things at the right place, 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 constantly changing markets require warehouses to have a great deal of flexibility. Depending on what the organisations needs are, third-party logistic providers enable access to thousands of carriers through a comprehensive logistics plan with the ability to scale labor, 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 synchronize inventory across all levels of the supply chain, the logistic infrastructure will let the organisation scale its distribution and fulfillment with ease.
- A 3PL will streamline the operational process by handling fluctuation in inventory, changing demands of consumers or change in distribution centre.
- Proper transportation is the root of any warehouse management. By using 3PL, organisations will have an aligned distribution network to overcome shifts in transportation.
- Expertise: The global market is getting tougher by 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, organisations can focus on core business initiatives.
- Cost Efficiency: Warehousing costs constitute a major 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 labor 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.
- Inventory Management: Managing storage, receipt, and outflow of products is the most basic and essential function of any warehouse solution. Third party logistics can help organisations in better tracking of trends in sales, which helps the organisation 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 process order requests
- Efficiently process the products that are returned by customers
- Enables Business Growth and Market Expansion: The fundamental goal of any business is expansion and growth, in order to achieve this goal organisation need flexibility in their sales fast, so that they can get sales from anywhere without adding too many operational overheads. The third-party logistics in supply chain management can enable the organisation that connects channel of sales, product details, pricing, inventory & order management, warehousing and shipping in consistent manner. This can lead to organisational success and increase sales without the waiting process.
Limiting organisations growth due to 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 better concentrate on their business 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.”