Third party logistics services can help struggling businesses with their supply chain management. After all, most companies would rather focus on their core competencies, like sales and marketing, than spend time worrying about the logistics of getting their product delivered to a customer.
3PL supply chain management is a notoriously expensive aspect of running a business. It requires a lot of human resources, monetary investment, time, space, and oversight. Let’s look at how 3PL works and why it may be suitable for your business.
How does a third party logistics services work?
3PL (fulfilment service) companies specialise in several physical logistics. These include warehousing and transportation, picking and packing, order fulfilment, inventory forecasting, and freight forwarding. Third party logistics services, simply put, is division of labour between them and your business, whereby one handles customer fulfilment while you run the company.
One way to be proactive with 3PL services is not waiting until it’s too late. Suppose you are looking for an effective way to handle your business’ warehouse, transportation, and inventory needs but often become overwhelmed by the recent growth of orders that can’t be fulfilled in house. In such a scenario, it’s best to find a 3PL business before things get out of hand.
Here are reasons why you should consider partnering with a third-party logistics provider:
- Your product is time-sensitive: Utilizing a third party warehouse can speed up critical warehouse needs for products that need to move quickly.
- You are a startup company: Warehouse expenses are the most common challenge facing startups, especially when they’re not yet profitable. Partnering with an outside warehouse can free those costs up more quickly than if you were to build one on your own.
- Your warehouse is too big: Warehouse space can be expensive. One of the advantages of working with third party logistics services is that you don’t have excess warehouse space sitting around when you only need it once in a while.
- You are in a remote location with no warehouse: Warehouse space might not be available where you want it to be. Third-party warehousing can provide warehouse and distribution services closer to your customers, providing greater convenience for them.
They can also manage non-core functions, freeing up your internal resources for more complex tasks. This could include customer service, workforce management, marketing efforts, engineering research, and product development activities, among others.
How can third party logistic services improve my business?
- Reduce inventory levels: As a company, you want to have enough inventory for your customers.
- Optimise space: Does your warehouse need more space? Do you require equipment leasing capabilities? Third party providers offer warehousing 3PL services and some even provide equipment leasing capabilities. They can also manage non-core functions, freeing up internal resources for more complex tasks, including customer service, staffing, marketing efforts, engineering, research, and product development activities.
- Cost-saving potential: Given the stiff competition in today’s economy, companies must look at every opportunity to save 3PL costs without compromising on the quality of service or product offerings.
- Free space for productive use: When your company uses a third party logistics services for inventory management, you may be able to free up space in the warehouse that can be allocated for more cost-effective and productive use.
- Improves service levels: How many times were you unable to deliver on time because of an unexpected interruption in material or supply deliveries caused by natural disasters or man-made events? Third party providers are well versed with risk mitigation strategies and offer them as part of their services package. Third party logistics providers also have contingency plans ready, ensuring continuity of service at all times, even during difficult periods.
- Adaptations to changes in customer needs: Sometimes, customers want something different from what was requested originally. The ability to adapt and offer what the customer needs is crucial to your service. Third party providers have a deep understanding of supply chains, warehousing, inventory management, and transportation which enables them to provide these value-added services.
- Integration with other systems: Many businesses today are turning into complex ecosystems consisting of more than one system working together to increase efficiency. The third party provider’s logistics expertise comes from its experience with different types and business sizes. This can help you achieve seamless integration across various systems so there will be no glitches at any level within your organisation or operations chain.
- Flexibility: If your company fluctuations in order volumes especially during certain peak seasons, it may be wise to outsource third party logistics services.
At Invenco, we strive to offer online business owners quality and efficient services like capacity planning, transportation coordination, and freight forwarding—we’ll make sure everything runs as it should!
We also offer warehouse storage which is securely monitored 24 hours a day and is fully compliant with Australian regulations. You don’t need to worry about storing your valuable assets.
With our outstanding customer service team behind you every step of the way, you can be assured of unmatched third party logistics services. We take pride in our mission to provide a seamless and easy experience for you and your business. Contact Invenco today to get a quick quote so you can scale your business in the most efficient way possible.