Is Outsourcing Logistics Right for Your Business?

Deciding whether to outsource logistics is a critical question for many companies, especially when dedicating precious resources to non-core processes may not make sense. Outsourcing logistics to a third-party logistics (3PL) provider requires trust, but the benefits—in terms of profitability and customer satisfaction—often make it worthwhile.

So, how do you determine if outsourcing logistics is the right move for your business? Here are some guidelines to help you make an informed decision.

Analyze Key Performance Indicators

Before deciding whether outsourcing logistics to a 3PL provider is the best route, conduct a thorough analysis of key performance indicators. Consider the cost of your current supply chain operations, compare in-house logistics versus outsourcing, and evaluate the financial impact on your company and its stakeholders.

Additionally, analyze the performance of your existing supply chain to identify any gaps or challenges that may be costing your company money. This analysis should also consider the suitability of outsourcing in alignment with your overall supply chain strategy.

Involve key personnel from operations, sales, and accounting in this analysis to gather a comprehensive perspective on the potential benefits of outsourcing third-party logistics.

Outline Your 3PL Expectations

After analyzing your key performance indicators, outline your specific goals for using a public warehouse with 3PL services. Most businesses seek to achieve one or more of the following objectives:

• Reduce costs
• Increase revenue
• Enhance capabilities

However, within these broad goals, different companies may have varying priorities. For instance, one business may aim to reduce operating costs, while another might focus on lowering capital investment or meeting downsizing objectives.

Similarly, a company may want to increase revenue by gaining supply chain flexibility and responsiveness, while another might be looking to speed up time-to-market or reduce customer response time.

Outsourcing logistics can also enhance capabilities, such as gaining access to advanced technology more affordably or creating additional or backup capacity.

Clearly identifying your goals will help guide your conversations with potential 3PL providers and assist in selecting the best fit for your needs.

Decide How Much of the Supply Chain to Outsource

A 3PL contract can be tailored to meet your specific needs. Most public warehouses offer a range of logistics services and can design a supply chain process that complements your existing structure.

You might choose to outsource specific aspects of your supply chain, such as warehousing, order fulfillment, distribution, or reverse logistics. Alternatively, you could outsource the entire supply chain operation.

Address Concerns About Outsourcing

It’s natural for companies to have concerns about outsourcing logistics. Common worries include the potential for higher costs, a drop in customer service levels, or a perceived loss of control over business operations.

It’s essential to address these concerns before making the transition to outsourcing. When interviewing potential public warehouses, be sure to discuss your expectations and any apprehensions so they can be addressed in the contract agreement.

Choose a 3PL Public Warehouse

An evaluation criteria checklist is a useful tool when selecting a public warehouse. The checklist should include functions such as procurement, warehousing, order fulfillment, customized packaging, and transportation management that you expect the 3PL provider to handle.

For each function, identify specific processes like inbound inspection, picking, tracking, and reporting. Then, develop evaluation protocols covering aspects such as product knowledge, customer interaction, service levels, and distribution response times.

Match this list against the capabilities of each public warehouse you’re considering. Pay close attention to the logistics provider’s facility infrastructure, technology, equipment, and personnel to determine if they can handle the scope and scale of your supply chain needs.

The goal is to ensure that the 3PL provider can execute your supply chain processes seamlessly, effectively, and efficiently.

Outsource to Brendamour Warehousing

We understand that setting up your supply chain operations with a 3PL can be challenging initially, but the rewards are well worth the effort. With 4 locations between Cincinnati and Northern Kentucky we can meet your Ohio 3PL and Kentucky 3PL needs.

At Brendamour Warehousing, Distribution & Services, we have the expertise and asset-based 3PL resources to make your transition smooth and stress-free. We are committed to ensuring the success of your business by becoming a vital partner in your operations. Contact us to learn more about our warehousing, distribution, and logistics services and how we can customize them to meet your specific supply chain objectives.

By outsourcing your logistics processes to Brendamour Warehousing, your company can focus on its core business, knowing that your goods are being delivered to your customers efficiently, accurately, and on time. The result? Cost savings, high customer satisfaction, and a healthier bottom line.

Contact us by phone at (513) 247-0077 or fill out our inquiry form here.