Warehousing and logistics can be time consuming and costly for small businesses. Third party logistics (3PLs) providers can be a smart and cost-effective way to manage this, instead of doing it yourselves. 3PLs will hold your stock and even ship it out to your customers when orders flow in.
When is it time to consider a 3PL?
17 June 2022
This brings benefits for businesses such as:
- Cost reduction
Because they work on scale, 3PLs can be more cost-effective than holding and shipping stock yourself – they’re likely to have more leverage than individual shippers. - Flexibility of scale
They can easily scale up and down with your demand requirements. - Mitigate risk
The 3PL takes the responsibility for the fulfillment of your orders. - And more
There are a few signs to looks out for which could tell you that a 3PL is the right choice for you…
Costs are steadily increasing
As your business grows, so does the demands on your teams that receive, pick and pack stock. This means added labour, materials handling, staffing and storage costs for stock. Using a 3PL can reduce costs and they have solutions that are scalable.
Your team is overwhelmed
When your team’s workload increases, you need to be able to take care of logistics and warehousing without taking away the focus of your staff from their core tasks. Outsourcing these tasks to a 3PL can allow your staff to have time focus on what they need to do.
Customer service is reducing
Are you noticing customers complaints increasing? It could be due to key aspects of your processes being missed or delays in customer shipments. This is where using a 3PL can improve operational efficiency and improve visibility of orders for you and your customers.
Making communication with 3PLs as seamless and efficient as possible
If you’ve decided that engaging a 3PL is the right choice for you, you want to make sure it does reduce your workload. That’s where an efficient communication process comes into play. You don’t want to have to email the 3PL or call them up to despatch an order when it’s placed. This is where EDI comes in.
Your 3PL may already be EDI-enabled. If you use fully-integrated EDI, you can exchange information with your 3PL, like orders, shipment notifications and more, through your existing EDI channel. That means you can automate everything.
If you’re using an EDI web portal, some offer the ability to send orders onto your 3PL to fulfill, and even have them complete the ASN if your customer requires it, all from the easy-to-use web portal. Take a look at how you can use Colladium for this.
