When to Make the Switch to a 3PL Provider

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A third-party logistics (3PL) provider offers immense value for assembly, distributing, packaging and warehousing. It empowers you with comprehensive resources that may give you a logistical advantage over your rivals, both now and in the future. Plus, a 3PL provider allows you to optimize your financial resources, ensuring you can deliver unbeatable support to your customers without having to break the bank.

So what is a 3PL provider exactly? A 3PL provider works with shippers to help them manage their operations, including:

  • Warehousing
  • Freight rate negotiating
  • Reporting
  • Forecasting
  • Freight bill auditing

In addition, some 3PL providers specialize in industries or logistics areas, offering specific services designed to support businesses that may require extra assistance with their logistics. Therefore, any business in any industry can receive logistical support thanks in part to a 3PL provider.

For many companies, a standard, full-service 3PL provider remains a top choice because this company provides service across industries. A full-service 3PL provider also uses best practices but understands that every business is different. As a result, this 3PL provider will make decisions on how best to manage your company’s logistics.

Leveraging a 3PL provider may pave the way for your business to meet or exceed its business goals. For example, consider the results of a recent report commissioned by Barclays and Moore Stephens that highlighted the growing value of 3PL providers in the UK.

The report indicated that 53 percent of business wins reported by logistics companies in the UK a six-month period came from customers changing their logistics providers. Also, the report revealed technology could become increasingly important for 3PL providers and their customers.

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“The high level of planned capital expenditure is welcome news for the industry and reflects the sector’s pressing need for investment in technology, particularly IT, to drive greater efficiencies, productivity and to improve service,” Rob Riddleston, head of transport and logistics at Barclays, told Logistics Manager. “Such investment is critical to winning new business and with margins increasingly being squeezed, the survey would suggest that operators are looking to invest now to realize the rewards to be had in this vitally important business sector.”

Ready to make the switch to a 3PL provider? Making the switch may seem like a tough decision at first, but ultimately, there are many reasons to choose a 3PL provider to support your business.

Here’s a closer look at five reasons why you should make the switch to a 3PL provider.

1. Receive expert support from a reliable supply chain management company.

Imagine what it would be like to enjoy expert support from a supply chain management company that knows exactly what it takes to deliver dependable assistance day after day.

Now you can, thanks to a 3PL provider.

A 3PL provider offers the resources and technologies you need to simplify your supply chain management. That way, your company can make the most of the resources at its disposal and ensure its customers receive reliable support at all times.

Supply chain management support also can provide your business with a competitive edge, which is reflected in recent data.

For instance, a PricewaterhouseCoopers (PwC) survey of more than 500 executives worldwide revealed 70 percent of respondents defined the supply chain as a “strategic asset” that enabled them to improve their overall performance by as much as 70 percent. However, the survey showed supply chain management remains “insufficiently recognized” among C-suite executives, a trend that may limit many businesses’ growth in the future.

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To become an industry leader, it is paramount to embrace supply chain management support any time it is available. And with supply chain management experts at your disposal, your business will be better equipped to assist its clients for years to come.

“In business-to-business relationships, long-term loyalty and predictable order flow seem to have become relics of the past. At the same time, customers are tightening their requirements in terms of throughput time and perfect-order delivery while demanding continuous reductions in supply chain cost,” PwC notes. “Maximizing supply chain flexibility and managing multiple supply chain configurations have become the new imperatives for today’s supply chain executives.”

2. Discover a new way to reduce your expenses day after day.

Did you know a 3PL provider can help your business save both time and money consistently? That’s right, and with the right 3PL provider at your side, you should have no trouble optimizing your resources going forward.

The 2016 20th Annual Third Party Logistics Study, conducted by the Council of Supply Chain Management Professionals (CSCMP), illustrated the value of supply chain management support for companies of all sizes.

This survey indicated 3PL providers and their customers “are becoming more proficient at what they do, individually as well as together, which is improving the quality of their relationships,” according to CSCMP. In addition, the survey revealed the majority of 3PL users and 3PL providers reported successful partnerships.

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Getting on the same page as a 3PL provider may help your company save money that could be invested in other areas of its day-to-day operations. Meanwhile, a 3PL provider will work with your business to ensure it can optimize all of its supply management resources, which may enable you to lower your operating costs for years to come.

Also, it is important to consider your business’s long-term potential, especially when it comes to understanding the true value of a 3PL provider.

For a business that is looking to expand, a 3PL provider offers sustainable support. This provider will handle a variety of tasks for your company so you won’t be required to do so, and these responsibilities include:

  • Order fulfillment needs
  • Packaging/labeling demands
  • Returned stock requests

On your own, managing these responsibilities will require extensive time and resources. And for a business that is looking to grow, the added expenses associated with these tasks may be too much to handle at one time.

A 3PL provider enables your business to explore growth opportunities and capitalize on them when they become available. As a result, this provider will handle myriad tasks effectively, making it easier for you to grow your business at your own pace.

3. You can reduce risk for your business.

Even a single customer mistake can cause long-lasting damage to your business, its customers and its employees. Plus, there always is the possibility that this error will harm your company’s reputation, which may prevent your business from attracting or retaining clients in the future.

When it comes to supply chain management, why leave anything to chance? Instead, a 3PL provider ensures your company can minimize risk consistently, making it a superb option for companies of all sizes.

For example, consider what may happen if you decide to handle your own logistics decisions.

In this scenario, you’ll need to take a lot of risks. Because your business already has plenty on its plate, you might lack the necessary time and resources to examine various trucking fleets and carriers. As such, a poor choice could prove to be costly, especially if a trucking fleet or carrier fails to meet your day-to-day business needs.

Comparatively, a 3PL provider always will ensure that your shipments are in good hands. This company is committed to its craft, and as a result, will do everything possible to guarantee you get the support you deserve at all times.

Let’s not forget about the customer service offered by a 3PL provider, either. If you ever have questions or concerns, a 3PL provider remains only a phone call away and is happy to provide you with consistent assistance.

Risk can be extremely problematic, but a 3PL provider can help reduce supply chain management risk. With a 3PL provider at your side, your business can enjoy ongoing support for its supply chain management that could help it expand quickly.

4. A 3PL provider can help your company stay on track.

A business cannot run itself. Instead, it requires a team effort for a company to perform consistently. And with assistance from a 3PL provider, your company can reduce the time and effort it needs to track and route shipments, ensuring these shipments arrive on schedule every day.

To better understand how a 3PL provider can help your company stay on schedule, let’s consider the following scenario that just about any company might encounter:

A business ships a package to a customer and informs the customer about the shipment. However, after several days, the package still has not arrived at the customer’s home. The customer contacts the business to learn more about the package’s location, but the company cannot find any information regarding the shipment.

In this scenario, both a business and its customer may encounter a variety of problems.

First, the business may lack the necessary tools to track and ship its packages properly. And if a customer’s package goes missing, he or she wants to feel good about the customer support he or she will receive from the shipper. Otherwise, a company that fails to identify the cause of a lost shipment risks alienating its customers. And perhaps even worse, an unsatisfied customer may choose to go with a business’s rival in the future.

Using a 3PL provider, comparatively, makes it simple for a business to track and route its shipments. This provider always ensures that customer packages are shipped on time, every time, thereby reducing the risk that an important package will arrive late.

Because a 3PL provider is dedicated to client satisfaction, it continuously will go the extra mile to keep your business and its customers happy. And when it comes to helping your company stay on track with its day-to-day shipments, this provider will do everything possible to help your business avoid the dangers associated with shipment delays.

5. A 3PL provider can help your business deal with change.

Is your business prepared for sudden logistics changes? If not, it may encounter many problems, particularly if it lacks a 3PL provider.

Logistics changes are common, and over the course of a day, week, month or year, a company’s logistics may transform instantly. From busy periods where it may seem like you don’t have enough staff to handle all of the customer requests coming your way to the times when you might only need to handle one shipment in a given week, managing logistics can be tricky for even the most experienced individual.

To successfully manage day-to-day logistics, it is key for your employees to work smarter. In fact, a recent Peerless Research Group (PRG) report indicated that many companies are expecting employees to take on even more responsibilities. This indicates that sophistication in technological adaptation will grow to be even more important in the near future.

Also, the PRG report showed 77 percent of respondents said they recently were asked to perform additional day-to-day tasks by their superiors. 20 percent of respondents said their day-to-day activities have remained unchanged, according to the report, while three percent reported a decline in their regular tasks.

“From a statistical perspective, the evidence clearly points to workers being asked to put in more time and energy to get ahead,” PRG Research Director Judd Aschenbrand told Logistics Management. “Those working smarter and adapting to the necessary technological tools will certainly be able to accomplish the increasing work load at an easier pace.”

Like many businesses, your company expects a lot from its employees. But when does an employee’s workload become too much? If your company is not careful, it risks alienating its employees by overloading them with work that may be too much to manage.

Fortunately, a 3PL provider can help you avoid this problem altogether. Because a 3PL provider boasts a best-in-class staff of its own to handle your business’ supply chain management needs, it can help your company keep its employees focused on its everyday tasks.

In addition, a 3PL provider further reduces the chance that your business may waste time or resources — a major problem for companies of all sizes. But with a 3PL provider, your company may be able to reap the benefits of a provider that offers automation, which is becoming exceedingly important for today’s businesses.

The most recent Duke University/CFO Global Business Outlook, released in December 2015, showed that more than 80 percent of chief financial officers (CFOs) said automation and technology play important roles in their operations and allow their organizations to become more productive Also, almost 80 percent noted that process changes have helped their organizations become more efficient.

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“Technology-enabled process improvement has been a focus for a lot of firms over the last several years,” said David W. Owens, editorial director for CFO Research.

A 3PL provider makes it easier for your business to benefit from an external company that will fulfill your supply chain management needs. And with this provider, your company can minimize the dangers associated with wasted time and resources.

Finding a 3PL provider may seem like a challenging process, but with the aforementioned tips, your business can discover the benefits of a 3PL provider in no time at all. Remember to use all of the resources at your disposal throughout the decision-making process to make an informed decision about your 3PL provider. And as a result, you should be able to find the right 3PL provider for your business — one that will deliver outstanding support day after day.

If you’re a NYC city or tri-state area business that’s ready to work with a one-stop delivery service, contact Mitchell’sNY Logistics today. We tailor our services to meet your needs, and we’re ready to provide a free quote for your business.

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