Growing companies endure challenges as their client base expands, and as they expand geographically. Changes in manufacturing dynamics, logistics and other factors associated with growth necessitate growing companies to make adjustments.
Faced with such challenges, companies react in either of two ways. First, they can decide to take the changes in their stride and invest in processes and systems that seek to address these challenges in-house. However, this option is very costly and comes with logistical and infrastructure issues that are best left to a third party. This brings us to the second option: signing up a third party such as 3PL to handle the logistics side of the business.
Below are six of the benefits accruing from the use of 3PL services.
1. Relieves Operational Logistics
As companies grow, they require more warehousing space, which is often beyond their ability to manage. A 3PL warehousing solution is perfect for companies facing storage challenges. In some cases, a growing company is faced with transportation challenges. Instead of investing in the purchase of fleets of vehicles, a viable alternative is to use the more cost-effective 3PL transport providers. Where a company seeks to expand across the borders, 3PL provides a depth of experience that is critical to overcoming the logistical challenges involved in such a move.
2. Overcome Customer Service Challenges
Keeping customers happy and contented with your products and services is the lifeblood of a successful business. However, the sheer volume of orders, fulfilling and tracking them, inventory management, technical services, among others, can make customer service a nightmarish affair. However, a 3PL service can easily handle the logistical and operational must-dos.
3. Saves Cost
Due to their vast array of networks spanning the country and across international borders, 3PL providers are able to cut drastically your logistics and operational budget. Some of the cost-benefit areas you get by collaborating with a 3PL provider include saving costs in human resource, transportation, warehousing, and technology. Your company can take advantage of the 3PL infrastructure and avoid the huge investments that setting such a system would cost. You can instead redirect these savings into other core areas of your business.
A growing business needs a certain level of flexibility to thrive. A 3PL service has the flexibility and agility to respond to your company’s growth demands. It can adjust to a low season where demand for your products is subdued or quickly adjust to a high season when demand for your products is skyrocketing. For instance, with increased demand for products during the holidays season, a 3PL provider is able to scale up services and capacity to serve your growing customer base. After the high season is over, a 3PL provider is able to ease back into normal demand mode.
Besides saving costs, with time, you start seeing improved efficiency. This can take the form of shortened delivery times, lower unit cost per item shipped, quicker transportation, and enormous timesaving that can be spent on your company’s core activities such as market growth, product development, customer service, etc.
6. Improved Customer Experience
The end beneficiary of efficient services is a happy customer. 3PL results in reliable and faster delivery times, fewer chances of product damage, improved communication on order status, etc. These improvements leave behind a contented customer who is likely to remain with you into the future. Besides, a satisfied customer is the best brand ambassador you could hope for.
3PL involves delivering services to a company with a view to reducing costs, streamlining processes, and enhancing efficiency. The beauty with 3PL services is that they are scalable and flexible enough to meet the growing needs of your business. You can use the services on a need basis or as an enduring solution in line with your business objectives and goals.