It’s a big question to ponder upon whether to invest a heavy amount of money on a warehouse or outsource this to a 3PL provider? Why does it create a dilemma for businesses? Because even after putting in money, they might still not get the results they predicted due to lack of efficient methodologies, insufficient knowledge and expertise. That’s why it is a good idea to get the expert 3PL provider on board who will effectively manage this important function of your supply chain.
Read on to know how you will get the desired flexibility, unmatched cost savings, faster and better order processing when your storage and distribution operation is managed by 3PL provider –
1. No initial CapEx investment required
The first thing you need for storing goods in a proper manner is a good warehousing space. Modern supply chain requirements are not confined to a godown-like structure. You need a good racking system, MHEs, current IT systems and other assets to aid the operation. By now, you must have realized that it’ll require a huge amount of initial investment. By getting a 3PL onboard, you will get access to their world-class facility and their knowledge and expertise. This way you would free up this huge amount of money and invest it elsewhere in operations. Rest assured that this wise move will pay you well in the long run too.
2. Pay when you use
Best 3PL provider knows your money is important, so they don’t make you waste your asset for paying for storage even when space is lying vacant due to seasonal demand variations. This way you pay for space only when you are making use of the storage facility.
3. Direct cost benefits on distribution
During distribution operation, 3PL provider consolidates the volumes from multiple customers and this way the overall cost is lesser than what would have otherwise been. You can directly feel the savings in your bank account as these get passed on to you from the service provider. Keep in mind that on your own, you would not only manage the distribution process on your own but bear the comparatively higher costs.
4. Better visibility, more efficiency with WMS
3PL provider brings the most suited version of WMS to your warehouse. They get it integrated with your existing ERP providing you all the information on inventory, orders in a few clicks with relevant reports as and when you wish to see them. Buying a full-fledged WMS on your own and then getting the staff trained for using the tool is a cumbersome task with higher expenditure. With 3PL there in partnership with you, you don’t need to incur all these additional costs.
5. Responsibility lies with 3PL provider, management becomes easier
3PL provider takes the whole onus on their shoulders for all the operations and even when there is any uncalled failure or glitch in operations, the 3PL provider takes the responsibility and rectifies it within a quick span of time. Another point to mention is that you don’t need to bury your head deeper in managing the issues of storage and distribution process. You get a bird’s eye view through the insights of 3PL provider and your role in managing gets relaxed. You may utilize this free time in drawing bigger plans and strategies for your business.
6. Add more value to your operations
As has been mentioned earlier, storage and distribution are not about keeping the stock at one place and moving it when needed. 3PL provider offers you additional value added services like kitting, labeling, packaging and assembling for your requirements.
From the above six points, it is safe to assume that there is no reason in creating an unnecessary headache for you in managing the storage and distribution operation on your own. You can look for a 3PL provider who has strong credentials and will suit your business needs the best. This way you will be assured of better results in your supply chain.
Holisol is a leading supply chain organization providing solutions in retail (end-to-end fulfillment), Auto & Engineering (packaging & supply chain) and Consulting. Holisol works on the value proposition of Design-Implement-Manage to offer customers an experience of working like their own extended team, with affordable strategic and operational expertise.
Holisol has a workforce of +300 supply chain enthusiasts who are continuously building value through leadership, innovation and relationships. For more information visits us at www.holisolscs.ae
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