Numerous retailers and manufacturers discover themselves grappling at the question of whether to outsource their logistics needs or not. Although it may be an easy choice to outsource these functions for small businesses, it is not so simple for larger manufacturers. While larger businesses have a volume and scale to do it themselves, many find that outsourcing certain aspects of their logistics process to third party providers works out to be more cost-effective. But, most businesses are already working with a third-party provider and question if the grass is greener on the other side.
There are many reasons why either choice can work. But it is important to which option works best with your company’s strategy. Consider how they relate to three primary areas; technology, people and vendors. It does not necessarily matter which option your company take, but here are several tips and considerations that may help in the decision of what is the right move for your company.
Think Past the Initial Investment
Many small companies do not have the resources to build facilities, staff and processes in order to carry out fulfilment obligations themselves. However, the choice is not as simple for larger retailers and manufacturers. As companies begin to reach a scale that rises the amount of return on investments, it becomes important to look beyond these initial investments. Contemplate whether the company has the ability to commit continual and unpredictable investments that is needed to improve capacity. It is also important to consider if it is beneficial in the long run to commit to these investments.
Ask The Right Questions
If you are thinking of working with a 3PL, it is crucial to understand that not all providers are the same. Evaluate which provider will meet your needs by considering the following:
- How does your third-party provider manage accounts? The greatest advantage to working with a 3PL is that you spend less money, time and energy on logistics and more on your company. However, if your 3PL provider does not use the right management structure, it can cause a stain on your business and end up costing you more.
- Does your 3PL provider give you access to reporting statistics? The ability to review and asses your customer support, logistics and order-to-cash data is important to running a successful business.
- Does your third-party provider have supervisory expertise? Nothing can delay the success of a product like regulatory issues. Although, most issues can be prevented with correct knowledge of the industry. Be certain that you 3PL provider has a strong relationship with FDA and DEA and ensures your product is handled correctly.
Here at Bridgewater Logistics, we provide third party logistics to multiple clients from our facilities in Kempton Park. Visit our website for more information today!