The last post discussed overall 3PL outsourcing considerations. Here are ten specific benefits to employing a 3PL warehouse:
Focus on what you do best
Most small businesses recognize that time is spent on picking, packing and shipping detracts from other tasks that are more core to the business. Utilizing an effective third-party logistics company will free up the workforce to refocus energy on promotions, selling, manufacturing and product design. The time-savings of using a 3PL service frees up management time as well.
3PL fulfillment companies offer a dedicated and experienced labor force as the core service of their business. Every day, they process and handle picking, packing and shipping operations, even complicated ones. In addition to that, they have a team in place to handle all types of order and purchase management, receiving, handling returns, price shopping, along with premium customer service.
Meet Seasonal Demand
Some companies require seasonal help. Suppliers can avoid an untrained and unproductive in-house temporary workforce brought in for seasonal work. A 3PL company can help provide a temporary workforce to assist during specific times of the year when the supplier is experiencing a spike in sales. By outsourcing the responsibilities of supply chain delivery, suppliers can be assured of always having the proper amount of labor available to meet customer demand.
Reduce Benefit Expenses
Companies can significantly reduce the benefits (life, health, 401k retirement matching) by outsourcing the picking, packing and shipping services of the company to an outside 3PL warehouse. This allows the opportunity for the supplier to control and minimize their hiring, labor and employee expenses.
Reduce Shipping Costs
Third-party logistics companies typically negotiate much lower rates than small businesses can obtain due to the large volumes of shipping out of one fulfillment center location. Numerous 3PLs will pass along the discounted shipping rates to the supplier, which can significantly reduce monthly shipping expenses.
Lower Storage Costs
3PLs maintain large warehouses and in many cases can store inventory at a lower cost. Special storage requirements such as temperature control can be efficiently met as well.
Reduce Capital Costs
Using a 3PL warehouse service eliminates the need to invest in physical distribution facilities, warehouse capacity, and logistics assets.
Faster Delivery Time
Product delivery times can be made faster by minimizing delivery distances. Shipping carriers including UPS and FedEx calculate the amount of time for shipment based on the regions of the country required for pick up and delivery. Many 3PL services operate out of the states located in the middle of the nation or close to customer delivery locations.
Meet Accuracy Goals
When utilizing the services of a 3PL warehouse, suppliers can achieve an accuracy goal of close to 100%. Successful 3PL warehouses utilize EDI technology to continuously communicate with the supplier for order fulfillment and to maintain accurate inventory.
Utilizing EDI services, the 3PL warehouse can maximize efficiency and maintain accurate communication with the supplier. Most 3PL’s can exchange EDI transactions with a third party EDI provider. EDI orders and other electronic documents help to to maximize efficiency, maintain proper accounting, and accurately manage inventory. They also provide shipping notifications back to the supplier and on to the supplier’s customer.
Many small companies have found the benefits outweigh the costs of outsourcing to a third-party logistics company that has the necessary personnel, training, equipment and facilities.3PL Benefits by Steve Brewer