The need for efficient order processing, fulfillment and deliverability may exceed in-house capacity as your client base and business grows. To ensure your business can meet product demands quickly and satisfy customers, you must ensure that accurate quantities of your inventory items are available and that orders for delivery are swiftly fulfilled. To retain an excellent order-fulfillment rate and take on more orders, outsourcing your distribution and warehousing helps meet demand without hiring full-time employees. This is where third-party logistics (3PL) companies come in. 3PLs offer commercial storage, inventory management and warehousing receiving and shipping, among other services. Here’s how third-party logistics companies can improve your business operations.
3PLs Save on Infrastructure Investment Costs
As your business grows and acquires more customers, this expansion may overstretch your distribution and warehousing capacity. At this point, you can either outsource these roles to a third-party logistics company or expand your capacity. Increasing capacity would involve renting more commercial storage space or leasing warehouse space, buying more delivery trucks and engaging more labor. This is not only capital intensive, but it also takes time to establish new delivery networks and manage this vital aspect of your business.
Leasing new commercial storage space to establish your new distribution centers comes with its own set of challenges and ongoing management requirements. Instead of eating deep into your profits to set up new supply chains and warehouse services, why not partner with a 3PL company that has already built a vast supply chain network?
3PLs Offer Inventory Management
Another common challenge that your growing business may face is inefficient inventory management, whether understocking and overstocking. Between managing your current market footprint and entering new markets or territories, it can be easy to miscount your stock volume. This is especially the case if you don’t have an adequate inventory management system, or your current system is overwhelmed by your business growth. A 3PL company receives, stores, manages and ships your inventory while offering real-time updates.
A good third-party logistics company utilizes sophisticated technology that ensures accurate inventory management and quality control, with real-time updates as needed. Therefore, you will not have delayed orders and late shipments because you sold an out-of-stock item, like 34% of businesses have done at some point.
3PLs’ Commercial Storage Services Can Be Tailored to Meet Unique Needs
As you expand your business and venture into new markets, you may start providing items that need special handling and storage. This may call for environmentally controlled storage facilities or special packing services and expedited warehouse shipping for your new products. Additionally, your need for commercial storage space may increase or decrease from time to time. 3PLs will adjust and change as your needs evolve to constantly provide new solutions to different challenges. If you need special labeling, kitting, packing, and other value-added services such as inventory management and shipping services, a third-party logistics company offers a superior solution over regular storage companies. Think about all the time, resources, labor and energy needed to accommodate new supply chain needs. Why go through all that hassle when a 3PL company can service your distribution and warehousing needs more efficiently and without slowing your order fulfillment?
3PLs Will Ease Your Overall Business Operations
Establishing a smooth, cost-efficient distribution and warehousing network will take considerable time. You might have to create and dedicate a separate supply chain department to ensure continued success. However, outsourcing these services to a third-party logistics company will enable you to focus on essential business functions without added overhead, hiring and training costs.
3PLs have more expertise and experience in inventory management, commercial storage services, warehouse shipping and international shipping. As such, they are familiar with supply chain management, shipping regulations, compliance requirements and transport documentation. Your 3PL partner’s level of expertise is essential to expanding your business operations.
Your supply chain network, commercial storage and warehouse needs should not slow you down when you want to expand and enter new markets. Third-party logistics companies will manage your supply chain so that you can focus on product development, marketing and acquisition and customer service. Gibbs Contracting can offer the services your business needs – contact a member of our team today.