3PL Trends and Best Practices
For those selling products and services online, there is great cause for optimism about the future.
Between Q1 and Q2 in 2020, retail eCommerce sales in the U.S. jumped by nearly 25 percent, more than doubling the 2016 Q2 totals. At first thought, it may seem as though this spike was influenced by circumstantial economic turbulence— which is mostly true. However, that does not mean that the new landscape we tread is a temporary one. The truth is, these numbers continue to trend steadily upwards at an annual rate of almost 6 percent, meaning that nationwide online sales revenues will soon be double where they were just months before the pandemic— a staggering (but sound) projection.
Although new players across the large plane of industries enter the market each year, the ratio of online sellers to buyer’s dollars is still unbalanced in favor of the former.
What does this mean?
It means that significantly more money is flooding the world of eCommerce than ever before— emphasis on significantly.
Due to ever-increasing demand, growth can come at any time for any organization, which is why it is imperative that processes are buttoned-up and practices are scalable and sustainable. Given the trends we see and the continuing migration to technology solutions, there are some important things to consider— especially for those in the eCommerce realm where business intelligence has such a large impact on revenues. There are many places for money to be lost and inefficiencies to go unnoticed but a few simple things can be of considerable help.
Use Metrics to Quantify Outcomes
When it comes to distribution processes involving inventories and multi-step fulfillment procedures, completion should not be the lone metric. Perhaps this works when orders are low and a single worker can manage all demand but this is not a sustainable system. As soon as the palette jack or forklift drops freight into the warehouse, process tracking should begin. Measuring induction rates, stowing capacities per worker, picking and packaging speeds as well as incidence of error are all data points that any warehouse manager should be able to easily provide.
Key fulfillment metrics not only help warehouse managers and C-level executives identify areas in need of improvement, but they also work to establish a standard that can be easily communicated to new workers. In short, such metrics will save you money and can be effectively established and tracked with the help of a good 3PL solution.
While technology certainly plays a role in effective processes, workers are invaluable pieces to the puzzle. Depending on the strategies of the organization, distribution can be broken up into many different segments all demanding different skills from warehouse workers. Whether it be operating machinery, problem-solving shipment errors, packaging, or whatever else, there is a lot to know. Bringing employees to proficiency in multiple areas can provide considerable benefits. Not only does cross-training increase worker motivation but it increases workforce stability and improves efficiency. It also makes organizations more agile when facing rapid expansion.
Choose Your Supply Chain Partner Wisely
In the world of eCommerce, maximum efficiency is the goal. For this reason, it is important to make sure that your logistics partner understands your shipping needs and has the expertise to provide you value along the supply chain. Specialized 3PL solutions are no doubt essential for any mid to large-sized operation— but not just any will do. Doing your due diligence to make sure a 3PL has financial stability, global network infrastructure, and the operational skills you need can make or break the future success of your operation.
As a leading 3PL solutions and WMS provider, Sequoia Group carries more than just the requisite expertise to get the job done. We work to align perfectly with the unique transactional and strategic requirements of our clients, helping improve sales year over year. If you have additional questions regarding 3PL best practices, don’t hesitate to contact us at 801-571-2300. We look forward to helping organizations as they venture onward into years of continued success.