Supply chains are an increasingly important part of any business strategy. As the world changes, they are also becoming more complex: transnational regulations, language and currency variations, blockchain issues, the creation and maintenance of local supplier relationships all factor into the decisions that need to be made.
Moving to a third party logistics provider is one way that many organisations resolve their difficulties with the supply chain, but 3PL is not a hands-off experience – working in partnership not only allows you to get the best from this relationship but can also give you the opportunity to plan for the future in a way that protects your organisation from future threats.
What is a 3PL?
A third party logistics provider is a specialist in the areas of supply chain and warehousing. They have expert knowledge, deep resources and experience of the wide field of logistics. Many 3pls also have specialist experience in – for example:
- Global supply chain
- Ambient goods transportation
- Live transport
- Blockchain – to name but a few.
All these, along with many other specialist areas of the supply chain that would otherwise take decades to develop, are available by choosing a 3PL partner with the relevant background.
Focus on finding the cost advantages
Many organisations pair up with a 3PL because they can see an immediate cost benefit. However, it can be most beneficial to conduct at least an annual review of what your third party logistics partnership has to offer. The obvious benefits are that 3pl working gives multiple companies the chance to share costs on space, transportation and labour. There are other benefits too:
- multi-client facility 3pl allows each customer to choose the floorspace or pallet racking space they need, which means that seasonal businesses can adjust their costs by the month
- value added services from labelling to personalisation to handling returns can give small businesses the big business feel without adding whole departments to their organisation
- specialist services like flower or livestock handling are immensely expensive, and the start-up costs are the highest in these areas. Specialist 3PL can get a new business off the ground without the investment costs that would otherwise be involved in setting up a specialist service team and facility
- some 3PLs now offer invoicing and factoring, giving their partners a reduced business administration overhead.
While most businesses can easily spot the big headline savings from their 3PL, it’s useful to sit down on a regular basis and find out what they have to offer as many 3pls continuously update their service offerings. Your own business will also be changing and considering your organisation through the lens of your 3PL can be a useful way to record your process and analyse your needs for the future.
Accountability as a tool for business growth
Establishing key performance indicators (KPIs) for your 3PL relationship and having regular reviews with your 3PL team to ensure you’re on track will give you a semi-external perspective on your organisation’s performance. It could be described as a benign audit, and it creates a level of accountability that can encourage you to take a clearer view of your day-to-day activities and how they are achieving your goals. You’ll have some kind of support team within your 3PL, so ensuring that your team and their team have close links will give you the chance to understand their processes and how you can best work with them. Not only does this allow you to take a rewarding perspective of your own organisation, it allows you to call upon the perspectives and insights of logistics experts who have a much wider experience of the supply chain than your business does, which gives you a better chance of spotting problems up ahead and finding supply chain solutions before they impact your business.
Exposure to technology
When you’re choosing your 3PL, you will probably want to look at whether they are using the latest technology from cloud based logistics through to RF operations that are image rather than text driven. Using the latest technology can, for example, improve your overall visibility of your logistics functions using real-time data via secure browsers to allow logistics tracking from minute-to-minute whether that’s in the office or at work. This doesn’t just give you oversight of your performance but can show weaknesses in customer service or areas where you can improve your margins. Supply chain collaboration is a three way process: client, 3PL, end customer and you can develop a much better understanding if your 3PL can give you this kind of visibility.
Rapidity of response
If your business is the kind that has fast-developing opportunities (the most recent we’ve seen has been the craze for squishies and its consequent supply chain demands), it can be vital to be working with a 3PL who has the ability – and capacity – to handle an instant transfer of information about the current need. This can help you by offering a rapid, reliable route to customer fulfilment, as well as offering you a more developed customer service facility, a consistent approach to order fulfilment, regardless of scale and rapid response to changes in the market.
Scalability across distribution territories
Who doesn’t dream of distribution worldwide? And while that may be a step too far for many organisations, expanding distribution can be a huge challenge, whether it’s simply reaching the whole of the UK or the whole of the globe. It’s a particular bugbear for those starting to work across national boundaries as warehouse operations can be fraught with huge amounts of legislation as well as local currency, cultural challenges and even hours of operation which can make remote management a demanding and costly exercise. Working with a 3PL that has warehousing facilities in the areas to which you wish to export can cut through all the red tape and give a company a foothold in a new territory without any of the cost of warehousing and distribution from the ground up. Good warehouse management plays a key role in the growth of a business.
If you’re looking for warehouse space for rent, we have an online directory of recommended warehousing and logistics companies UK that you can trust.
Simply contact us today on 0800 1707 555 to find your desired location, with various warehouse services available to fulfil all your business order requirements, including ambient temperature storage, pallet storage, ecommerce fulfillment and much more.