We’ve previously written about 5 Logistics Challenges a 3PL Can Help You Overcome, but that list was nowhere near complete. So, here’s the continuation.
If you haven’t read the previously mentioned post, we certainly find it to be recommended reading. If for no other reason, you can fully understand what a 3PL service provider like Best Global Logistics can do for you inside and outside of Thailand.
The Challenge: Keeping Up with Technological Trends
Having highlighted digital tools in our previous post, let’s continue to emphasize technology-related matters for a moment—given the significant reliance of today’s logistics on technological advancements.
Businesses without this essential infrastructure often encounter difficulties in maintaining competitive edge, as their well-equipped counterparts experience more efficient supply chain management, ultimately contributing to enhanced overall business performance.
Regrettably, numerous organizations that stand to gain from enhanced logistics technology integration often deem it impractical or excessively costly to adopt advanced solutions like TMS, WMS, tracking technology, and analytics tools.
How a 3PL Helps: The 3PL Must Keep Up
Should your company fall into this category, an alternative approach is available: you can access equivalent capabilities through collaboration with a 3PL possessing these technologies, which can be seamlessly integrated with your current digital platforms or granted direct access via web portals or similar interfaces.
The Challenge: Spiraling Logistics Costs
Certainly, as your company experiences growth, it’s natural to see a corresponding uptick in logistics expenses. However, these increases can often become disproportional and challenging to manage. This challenge becomes even more daunting if logistics isn’t a central focus of your business operations. In such cases, why not consider outsourcing to a specialized company dedicated solely to managing shipping, warehousing, fulfillment, and logistics?
In favorable situations, teaming up with a third-party logistics provider can lead to a reduction in your logistics costs. Alternatively, even if cost reduction isn’t immediate, such a partnership can effectively curb unchecked cost escalation. This strategic move can enhance your company’s competitiveness and contribute to improved profit margins.
How a 3PL Helps: Cost Controls
A third-party logistics provider offers several avenues to effectively manage and control your logistics costs, encompassing the following strategies:
- Absorbing the labor expenses linked to logistics operations
- Capitalizing on their economies of scale to execute your logistics tasks more affordably
- Engaging in negotiations for freight rates lower than what your company could likely secure
- Providing the transparency needed to predict and circumvent issues and delays
- Implementing appropriate technology to streamline processes and ensure optimal efficiency
- Reducing inventory damage and loss through superior handling, storage, picking, packing, and transportation methodologies
- Enhancing your logistics procedures through suitable consolidation, transport mode selection, and routing decisions
These measures collectively offer considerable potential for cost savings. However, it’s important to acknowledge that some companies might initially witness a rise in logistics costs upon initiating a partnership with a 3PL. Thus, it becomes imperative to evaluate the long-term value rather than the immediate impact of outsourced logistics.
In essence, it might be prudent to accept slightly elevated costs initially in order to attain superior cost management and mitigate potential increases over the course of the partnership.
The Challenge: Inventory Management
- Maintaining precise inventory accuracy
- Addressing inventory obsolescence
- Overcoming limited visibility into inventory status
How a 3PL Helps: Simplification of Inventory Management
Should your company encounter challenges in enhancing inventory management efficiency, and you find yourself lacking the essential technology, expertise, or resources needed for optimizing this aspect, the prospect of a 3PL partnership emerges as a practical and effective solution.
Engaging a 3PL can offer valuable assistance, regardless of whether you opt to store your inventory within their warehouses and distribution centers. For instance, if your company presently owns or leases warehouses, there exists the potential to entrust the operational management of these facilities to your chosen logistics provider.
Whichever approach you choose, given that inventory management forms a fundamental facet of a 3PL provider’s core operations, you can anticipate that upon outsourcing, your provider will collaborate with you to fine-tune inventory levels, maximize warehouse space utilization, uphold precise inventory records, and curtail the necessity for maintaining excessive buffer stock levels.
Is a 3PL Right For You?.
If your company is grappling with enduring transportation issues and you are uncertain about the potential benefits of outsourcing to a 3PL, the consulting BGL Team can provide assistance. We are eager to help you evaluate various possible remedies and support you in implementing the best solutions. To learn more, we invite you to get in touch with us and book a free consultation call.
To gain deeper insights into how we can support and advise you in evaluating solutions to these challenges, simply contact us and schedule a free initial consultation.
Let’s engage in a discussion about your specific logistics challenges, and subsequently, we’ll present you with a detailed explanation of how we can assist you in selecting the most suitable solution. This may involve 3PL logistics outsourcing or exploring other carefully chosen measures tailored to your unique requirements