Industrial – Workplace March 2018
The saying “work on your business, not in your business” is one that New Zealand operators can sometimes struggle with, as the good old Kiwi do-it-yourself ethos runs pretty deep.
However, industrial business owners need to be focusing on the big picture stuff – not personally micromanaging every single facet of their operation.
The rise in third-party logistics – or 3PL – providers in this country is mirroring international business trends. As the e-commerce world expands, so too does the out-sourcing of activities relating to logistics and distribution.
Engaging a third party provider has numerous on-going benefits for an industrial business and could help you to streamline your supply chain, stay on top of consumer demand, and increase your profits.
It’s all about working to your strengths and delegating the order fulfilment and distribution part of the business equation to a specialist contract warehouse provider. They collect/receive your inventory and make sure it gets delivered to your customers on time and in-line with your company’s expectations.
Today, 3PL is swiftly being superseded by 4PL and even 5PL, with complete supply chain solutions from procurement to distribution – and everything in between – being outsourced, including the development and overseeing of sophisticated, integrated computer systems.
Before you find yourself bogged down with unfulfilled orders and logistical nightmares, consider a 3PL solution.
• An innovative and experienced 3PL partner will take the distribution part of the business equation off your hands, leaving you free to work on your business’s long term goals
• The 3PL provider could handle the inventory shipment between your factory and your warehouse or between you and your buyer – you call the shots
• Potentially, you could move more product, more efficiently, more safely – and more cost-effectively
• Outsourcing gives your business flexibility and scalability
• The money you currently spend on warehouse storage could be freed up – storage costs could be reassigned to fulfilment
• You won’t have to employ staff to handle inventory management, handling and distribution – and in turn, that relieves you of some associated responsibilities such as payroll, leave arrangements, desk space, human resources issues
• A third-party provider has economies of scale as they have multiple clients and can provide a cost-effective service to you
• Any change in your business model can be handled accordingly without you having to worry about staffing levels or adjusting storage capacity in-line with seasonal supply fluctuations – with 3PL, you will only pay for the time actually spent on your account
• If you deal with offshore suppliers or overseas retailers, the 3PL provider has the networks, the experience and the ability to navigate the compliance issues required for import/export
• As consumer expectations around delivery timeframes and service get more demanding, you have the peace of mind knowing that once the systems are in place, an expert third-party is taking care of the nitty-gritty
• A 3PL partner will usually be able to negotiate better transport/carrier rates than you will as an individual business, as they aggregate their volumes
• 3PL providers have established relationships and partnerships at every point along the supply line
• Because 3PL is a fast-growing sector, providers are fine-tuning their offerings, improving their services and eliminating efficiencies to stay competitive – you can benefit from this
• There’s a 3PL provider for every size business
The customer relationship buck will ultimately stop with you – your business is customer-facing, not the 3PL’s – however, partnering with a third party can smooth the supply path.
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