Inventory Issues? How to Improve Your Supply Chain Operations
There’s no question that companies have experienced supply chain issues due to COVID-19. While some brave companies chose to weather the storm and independently overhaul their operations, others enlisted third-party logistics (3PL) providers. 3PL providers are logistics and supply chain management experts who have all the tools, technology, processes, personnel, warehouse space, safety stock, shipping fleets, and relationships to handle massive operational overhauls and create a lean supply chain. 3PLs are a cost-effective way for businesses to automate and scale their supply chain. Let’s explore some ways that 3PL can help your supply chain operations:
Flexible Storage Solutions
Managing the ebbs and flows of inventory is a difficult task even in predictable years. Seasonal increases and decreases in demand can be costly if you pay for too much storage space or too little storage space. Storage solutions such as warehouses can be expensive to staff, maintain, and manage. Flexible storage solutions are a massive benefit of 3PLs. 3PL providers preserve tens of thousands of secured warehouse square footage with state-of-the-art inventory management solutions. The best 3PL partners maintain multiple warehouses all across the United States, allowing companies to split inventory across fulfillment centers and ensure redundancy in safety stock.
Safety Stock
Unexpected delays on a shipment can cost businesses thousands of dollars in lost profit and lost customers. 3PL providers ensure that companies have redundant stock or “safety stock” to buffer potential stock-out and inventory arrival. Safety stock plays a vital role in mitigating supply chain risks –– especially during times of natural disasters or pandemics. Safety stock inventory allows you to stay ahead of unexpected events by ensuring your business has inventory redundancy across various geographies.
Inventory Management
Both excess inventories, as well as insufficient inventory can drastically impact one’s business. Excess inventory refers to products, raw materials, and components that have yet to be sold or used. Low inventory refers to not having enough of this stock to satisfy customers. Both excess and inadequate inventory are avoidable through proper inventory management. 3PL providers use sophisticated, real-time inventory tracking tools to maintain adequate volume, identify excess inventory, and proactively reorder low-inventory items to prevent stock-outs. These tracking tools allow you to verify product quantity on-hand, measure units sold per day, and update your website’s “Out of Stock” notices in real-time.
Lean Supply Chain
3PR providers are experts at making sure that supply chains are well-designed and effectively operated. They ensure products are delivered quickly to customers with minimal waste. Companies with lean supply chains can deliver better customer value by responding more efficiently, fast, and predictably to customer needs and wants. Expert 3PL partners have a nationwide network of connected storage facilities and transportation options to ensure your supply chain pipeline is optimized to reduce delays between you and your customers.
Does Your Company Need a 3PL?
Choosing to outsource logistics to a third-party has both advantages and disadvantages. Each company should evaluate whether or not a 3PL is the right fit for their business objectives. Does your company have the budget and fulfillment staff needed to handle purchasing effectively? Does your company have enough warehouse space and personnel to fill, pack, kit, ship adequately, and deliver products? Does your company have technicians staffed to install, train, repair, troubleshoot, and maintain current hardware and software technology? Does your company have sufficient inventory and billing systems in place to ensure minimal shrinkage?
Fulfillment Help
Did you answer “no” to any of the above questions? Are these things you can quickly fix? Do the processes fit within your area of expertise – or are they additional tasks one of your team members has to add to their already heavy workload? If you’re not confident in your company’s ability to fulfill any of these supply chain requirements, you should consider partnering with a 3PL partner. While there are many 3PL providers of varying capabilities and expertise, choosing the right 3PL provider will save you time and money.