Pressure to reduce expenses, enhance customer service, and improve the supply chain process is stretching the ability of what in-house logistics managers can do with limited resources and budgets. Companies that form strategic partnerships with Third Party Logistics (3PL) providers can turn liabilities into competitive assets.
That’s because a quality 3PL provider can cut or eliminate your current supply chain overheads by streamlining your processes and positively impacting your bottom line.
3PL providers cover the fixed costs of owning and operating supply chain infrastructure by dividing those costs among its customers. The customer pays only for the space and services it uses, freeing up capital.
In addition, customer costs are simplified and can be forecast with greater precision. Variable costs can be attached either to a single unit or to a process, because fixed and even hidden costs of doing business are absorbed by the 3PL provider. As a result, distribution expenses and collective purchasing power can more effectively be allocated as a cost of sales. 3PL companies provide and absorb the cost of:
- Labor (warehouse staff, customer service rep)
- Employee training
- Capital expenditures (warehouse space, forklifts, special equipment, racks, supplies, etc.)
- Maintenance (buildings and equipment)
- Infrastructure insurance
- Supply chain technology
- Specialized training for employees (safety, technology)
Some managers believe that if they move to a 3PL provider, they will lose control of their product. In many instances, however, the opposite proves true. 3PL Providers are professionals in tracking, handling, storing, and distributing products. Because they can focus their attention on these aspects alone, a 3PL provider will often outperform a company that must also juggle manufacturing, forecasting, and marketing for its products.
3PL Provider Advantage
Additional advantages you gain from a 3PL provider include:
- Ability to execute company goals by aligning them with the 3PL provider’s portfolio of services
- Scalable space and service (pay only for space needed and services used)
- Flexibility for seasonal fluctuation
- Rapid response and comprehensive solutions for project-driven expansion/contraction
- Expansion without additional capital
- Reduced shipping and transportation expenses
- Peace of mind that professionals are handling your supply chain
Deciding you need to outsource part of your business, one that you built from the ground up under your direct supervision, is a tough choice. Luckily, the benefits far exceed the hassles.
But making the transition can feel like trying to change tires on a moving car. There are supply chain issues to consider, shopping cart interfaces, order cutoffs, system setup and testing, existing inventory to move, returns management options and more—all of which must be coordinated while continuing to fill your customer orders on time. Partnering with Safe Chain Solutions, a company that has the expertise to make this process seamless, is vital for a successful transition.
Safe Chain Solutions understands that our business relies solely on the success of yours. That’s why it’s so important to us to keep both you and your customers happy through the transition. Our proven methods allow us to maintain 99.9% order accuracy during this move. Our logistics and technology experts work closely with you and your management team to develop and implement a plan of action that not only fits the needs and demands of your business, but more importantly, those of your clients. All without missing a beat.
So what are you waiting for? Contact us today.