10 Reasons To Outsource Your Warehousing Operations
Posted On May 14, 2015 by
Warehousing your products is a crucial part in ensuring efficiency within your business.
Today’s extremely competitive global marketplace includes extended supply chains and multiple ways in which a company can choose to do business. The unseen costs can relate to safety, quality and efficiency of operations and in many cases makes a good case for outsourcing. Here are some key reasons why it may be time for your company to consider partnering with a third party for your warehouse operations.
1. Technology Advancements
With the endless evolution of technological advances companies are scrambling to keep up with the changes. The cost of constantly updating systems in-house can be costly. Turning to an outside third party who specializes in warehousing can prevent you from losing customers and revenues if you don’t have the proper infrastructure in place or the budget to maintain one in house. Typically, if companies try to add on newer technologies to existing legacy platforms, these costs will outweigh the cost of outsourcing.
2. Product Launch Deadlines
If targeted dates for new product launches are not being met consistently, it is a warning sign that internal personnel can not keep up with customer demand. Outsourcing to a third party can help smooth out this process and help your company keep up with demand in a more timely manner. Growing to fast can destroy a business, especially an online eCommerce store. If you do not fulfill for your customers they will never come back to your site. A great customer experience is extremely important online. A fulfillment company can help you warehouse your products to ensure efficiency.
3. Limited Facility Operations
If a production facility is down for a long period of time and your operation is not flexible enough to meet after hour deliveries and expedited service, your only choice may be to outsource.
4. Reduce Overhead Costs
If your overhead and fixed logistics costs are squeezing the bottom line, you may see instant savings by consolidating warehouse operations with a shared third party facility. This can move fixed costs to a variable expense to provide flexibility in responding to market fluctuations.
5. Meet Compliance Guidelines
The Customs Modernization Act requires specific compliance assessments that can be costly, such as employee education and training and operational procedures. Working with a 3PL who is already versed in meeting these standards can save your company the investment.
6. Additional Space
If your company is growing at a rapid pace and bursting at the seams with inventory you may need more storage space. Perform a cost analysis on buying or leasing more space versus utilizing an outside source already equipped to grow with your company’s needs. It may make more sense to move in the direction of finding an existing 3PL who already has the capacity to work with you.
7. Flexibility and Scalability
A 3PL has the flexibility to ramp up or down production at any time allowing for much greater adaptability to incoming customer demands. This can be a perfect solution for seasonal businesses who need quick reaction times to fluctuating demands.
8. Closer to Customers
Often outside warehousing operations have multiple locations that are closer to ports and customers. This can help you serve your customer base more efficiently saving you shipping and delivery cost and shortening delivery times.
9. Value Added Services
Third party warehouse operations often have several additional services available that your company may not have in place such as labeling, bundling, kitting and other special packaging needs. An additional perk offered at no additional cost to your company.
10. Increase Buying Power
Third party companies enjoy a significant cost savings due to economies of scale. The savings of packaging, supplies and shipping alone can really add up quickly. Consider where you can reinvest your savings to help grow your business.
Aligning with the right partner with the right expertise and resources to manage warehousing operations carries an enduring value that can provide current and new companies the momentum needed to succeed.