Today’s consumer-driven approach sets out new opportunities for innovation throughout the supply chain. However, they also make it more difficult than ever to run an efficient, cost-effective operation.
Consider the following difficulties supply chain leaders face today and how third-party logistics (3PL) providers are exceptionally armed to solve these problems.
Lack of visibility
As your operations grow and become more complex, visibility of inventory across every channel becomes an even greater priority. Advanced software programs are the natural solution to ensure you’re capturing data and inventory statistics. They are effective tools for analysing the information so you can identify opportunities for continuous improvement.
Many operations rely on tier-1 warehouse management systems, such as Manhattan and JDA, to enable tracking and visibility of all SKUs throughout the supply chain. But without proper expertise, system implementations run the risk of being costly and inefficient. This is where it makes sense to rely on a 3PL with implementation and execution expertise to optimize your technology investment.
Rapidly increasing volume of orders and inventory
Consumers have come to expect more product variety in a digital shopping experience, and 42 percent of global retailers are now supporting larger online SKU counts. This can increase expenses, complexity and picking time within the warehouse. Furthermore, it can lead to potential errors due to coordination with a greater number of vendors or manufacturers and the need to accommodate a greater variety of storage and packaging needs.
Growth is often associated with the need to expand your real estate footprint, but the right 3PL can find ways to optimize your existing space and processes so that you may not need to add facilities to your portfolio. By using a 3PL, you won’t run the risk of unused warehouse capacity due to their space optimization and inventory optimization capabilities. An effective 3PL will also allow you to quickly respond to increasing demand during busy periods and fluctuations throughout the year, given their labour management expertise.
A 3PL can allow you to achieve greater efficiency by avoiding additional touchpoints and unnecessary costs. A third-party supply chain expert will be able to analyse your current footprint and solutions, benchmark your costs against the industry and offer recommendations to build a better network. Furthermore, they can often implement a more robust or leaner solution, depending on your needs, by leveraging their existing network. Not only will this improve operational costs, but it will also keep customers from turning to your competition based on the superior service you’re able to deliver.
Every company has an area of expertise so by working with a 3PL provider, you can increase your bandwidth to focus on your company’s most important functions while maintaining visibility and achieving customer service objectives.
If you’re interested in learning more about how AMG Logistics can enable your business growth, contact us today.