As we start a new year, many businesses take the opportunity to review business performance and identify ways to improve or enhance certain aspects of their business processes. One major way companies can streamline business functions and realize significant savings that provide a measurable return on investment is outsourcing their logistics to a third-party warehouse and distribution provider.
Numerous research reports show that businesses gain a competitive advantage when they restructure their distribution network, an important factor when you consider the ever-increasing global competition in retail, e-commerce and manufacturing. Two influential studies on logistics outsourcing, one conducted by the Institute of Transportation Studies at the University of California, Irvine and the other by the Hamburg School of Logistics in Germany, indicate that businesses use a third-party logistics provider (3PL) for basic services like warehousing, material handling and transportation for three main reasons.
Reason #1: Brings the Focus Back to Core Competencies
Logistics encompass a wide breadth of services, from product packaging, labeling, warehousing, stock rotation and order fulfillment to packing, shipping and receiving, distribution and returns. And that’s just the main functions. There’s no denying logistics take up a lot of time, energy and resources, and if it’s not your company’s core competency, then logistics is taking attention away from the main focus of your business.
It stands to reason when you are able to do what you do best, business improves. Outsourcing warehousing and distribution allows companies to put their resources on their core competencies, whether it’s making a product or selling merchandise, and expand those money-making activities. At Brendamour, we’ve been helping businesses from small to large with a wide array of fulfillment and back-end operations so they can succeed in growing their company or becoming the best in their industry.
Reason #2: Cost Reduction
Business costs that can be eliminated or reduced through public warehousing are far-reaching. For starters, expenses associated with maintaining your own warehouse structure, such as overhead, insurance, staff, security measures, etc., are eliminated. So are related expenses, like building and equipment maintenance, fleet fuel, insurance and maintenance, cross-docking expenses, logistics software, and the like. These expenses are replaced by much lower costs paid to a logistics provider for warehousing and distributing your merchandise. Compared with in-house warehousing, the costs for outsourced logistics are much lower because infrastructure expenses are shared among all those using the warehouse. Costs are also lower because you share in the savings a 3PL receives from doing volume transporting with trucking companies and volume shipping with the major delivery carriers.
Reason #3: Improved Service
It’s a known fact: when your logistics are running smoothly, your business will experience improved customer satisfaction. That’s because logistics are the core competency of logistics services companies, so they invest in the best and most advanced processes, technology and services. For example, Brendamour Warehousing, Distribution & Services has the most state-of-the-art warehouse management system that handles our clients’ inventory, fulfillment, shipping, billing, order tracking and reverse logistics needs quickly and accurately. Plus, the system can quickly adapt to increased volume demands so satisfaction to your customers never wavers. By investing in logistics IT, we can accomplish things that are often beyond the capabilities of in-house warehouses. These advancements generally translate into high quality service to your customer base.
Let outsourcing your logistics be a New Year’s resolution you actually fulfill before year end. Call or email us today to learn how we can enhance your business operations and improve your bottom-line.