There are a variety of benefits associated with using a 3PL as a storage solution rather than opening a second warehouse location. Aside from providing storage, a 3PL offers a wide range of services associated with transportation and virtually all other aspects of shipping goods from manufacturers to their customers. Opening a second warehouse requires time, extensive funds and additional effort to be built into a company’s supply chain, but a 3PL is already equipped with the capacity and capability needed to manage all necessary logistics with ease. Read on to learn the top three ways a 3PL can help small and large manufacturers save money, streamline processes and make smart decisions.
1. 3PLs Save Manufacturers Money
From start-up costs associated with building additional space and staff to the ongoing costs required to maintain resources, manufacturers are burdened with the very high cost of doing business. Luckily, 3PLs are able to ease these burdens with managed services for logistics, including:
- Transportation Procurement
- Inventory Management
- Shipment Tracking
- Reverse Logistics
For transportation procurement, a 3PL handles the task of employing transportation companies for its clients’ shipping needs, as well as the subsequent management of transportation fleets as products, capacities and other needs change. 3PL providers also offer inventory management systems that guarantee accurate, reliable inventory counts through audits and inventory management software.
Shipment tracking and reverse logistics go hand in hand; while shipment tracking is the act of a 3PL company shipping product for a manufacturer to clients and customers, reverse logistics is the process of accepting returns from customers and ensuring monetary elements are properly managed. This also includes the management of damaged or unsatisfactory product inventory.
Each of these 3PL services save manufacturers’ capital and revenue by amounting to a single monthly bill. In addition, accurate transportation management and inventory tracking bring down surplus costs associated with delayed shipments and incorrect or excess inventory.
2. 3PLs Streamline the Shipping Process
Adding a 3PL provider to a manufacturer’s existing supply chain can streamline the entire shipping process from transportation procurement to freight audit and consulting. A 3PL provider allows for accurate tracking through the use of automated systems and extensive communication networks to keep a pulse on the status of a manufacturer’s products being sent through a variety of channels.
Using transportation management systems and electronic data interchange technology, both of which offer a higher degree of shipment tracking, 3PL companies are able to keep manufactures and customers informed of shipping progress and address any problems that may arise along the way.
3. 3PLs Provide Expert Insight
3PL companies are able to provide expert insight, recognizing that their main objective is to simplify supply chain logistics to provide their clients with more time for production or research and development. 3PL providers are also able to analyze data and trends to guarantee the most cost-effective, logical method of supply chain management and shipment modes and procedures.
Allowing a 3PL to analyze a manufacturer’s warehouse and shipping setup can lead to increased efficiencies and reliability for customers, translating to increased revenue and savings for the manufacturer.
Partnering with a 3PL rather than dedicating extra resources to build an additional warehouse makes sense; the storage, inventory management and shipping services of 3PLs save manufacturers a large amount of time and money. By offering a variety of 3PL services, they’re able to streamline the shipping process, ensure the reliable distribution of products and proactively mitigate or address any issues that may arise.
The insight provided by a 3PL can also help alleviate internal problems and strengthen weak links in a manufacturer’s supply chain. Constructing a second warehouse in a system that already operates poorly will only double existing inefficiencies and risks creating more along the way.
Does your supply chain need the support and expert insight of 3PL? Consult with industry leaders to streamline your supply chain today.