The COVID-19 pandemic which we all have been influenced by continues to have far-reaching effects, and may continue to impact businesses of all types well into the future. Within fulfillment and distribution operations, the impact has been nothing short of impressive. Decreased productivity, up-ticks in order turnarounds, and staff reductions have been the tip of the iceberg for many businesses.
When it\’s all said and done, and depending on which forecasting reports are to be trusted, the workforce could likely feel the effects of the pandemic for years to come. For those 3PL businesses that have been able to remain in operation or even thrive within this new economy, the supply chain continues to move and produce its own set of evolving demands.
As many companies look to improve performance and increase efficiency to stay viable, perhaps there hasn\’t been a better time since the recession of 2008 to look deeper at 3PL fulfillment.
Below we look at 5 ways businesses benefit from using 3PLs profitably, as opposed to internal fulfillment:
1. Decreased Capital Investment
Choosing the proper 3PL partner may allow for reductions within capital outlays. This may enable some businesses to jump into the driver\’s seat pertaining to other critical projects or company-specific needs.
2. Faster Time-to-Customer
In the Amazon-influenced marketplace, we now live in, customers expect lighting fast delivery times and lower shipping costs. By pairing with a partner with multiple fulfillment centers, your operation might better satisfy customer demands.
3. Additional Time
As an outsourced service, third party logistics often benefit businesses in a variety of ways. Core pillars of any business, such as marketing, innovation, strategy, and more, require proper time and effort. By taking back precious time, your operation may increase in health overall and become stronger in other imperative categories.
4. Return Logistics
Returns can be costly and have alone sunk businesses in the past. If your business has higher return rates, pairing with a trustworthy 3PL provider can be a cost-effective choice which saves you substantially per annum.
5. Cost Per Order reduction
Last, but certainly, not least on this list, larger 3PL facilities often have higher volumes which then justifies the technology (i.e. robotics, WMS, voice picking, etc) to make them stronger inefficiency.
In a down economy, difficult decisions must be made. Though third-party logistics may not be the best option for all companies, the argument against 3PL is getting tougher to make within this COVID-19 environment. Regardless of your particular intent to shift to 3PL, or to keep internal fulfillment running as normal, having a modern software platform to track and provide real-time data and updates is especially vital for long-term success.
At Sequoia Group, our team has partnered with distribution businesses of all types and empowered them with the dedicated support and solutions to ensure their success. We give you dependable tools that provide strategies, processes, analytics, and collaboration all in one platform. Let’s get the conversation started for your business.
