5 Ways a Good 3PL Can Improve Supply Chain Efficiency

5 Ways a Good 3PL Can Improve Supply Chain Efficiency

To keep up with today’s global marketplace, product companies must rely on many partners to help streamline their supply chain. By working with an experienced and qualified 3PL (third-party logistics) provider, you will be able to match the on-demand needs of your customers to the many analog processes that make up your supply chain: transportation, shipping, warehouse support, carrier relationships, and much more.  

Here are five ways a good 3PL can help contribute to a smooth, lean, and efficient supply chain.  

1. Transportation Savvy

The right 3PL will have experience navigating the many intricacies of the transportation arm of your supply chain.

Transportation is complex because it involves varying modalities (boat, plane, truck, etc), many options for speed and timing (2-day, overnight, etc), and a range of levels of quality and service. Shippers know and understand the intricacies involved, but an experienced 3PL will have a deeper knowledge base. A logistics provider will have experience with many clients shipping multiple products a year, thus they can see trends, best practices, and inefficiencies that a single business owner might not. This vantage point provides a unique ability to benchmark costs and services based on long-term data analysis and historical knowledge.

By working with a 3PL you will benefit from their diverse and comprehensive experience, and be privy to their ability to negotiate and manage transportation decisions better for you. They might have good advice on carrier selection and availability, opinions about best and worse software or analytics platforms, and access to scales and measurement tools.  All of this will add up to a more cost-efficient and reliable transportation section of your supply chain.

2. Transparency

A 3PL can help make your supply chain smoother simply by giving you a real-time view into the many moving parts, their efficiencies, issues, blockages, and more. With supply chain transparency, you will be better able to make decisions for all parts of your supply chain.  They can help communicate with carriers as they navigate through all types of obstacles—weather, traffic congestion, hours of service constraints. They operate fulfillment centers that store and handle your product multiple times while in transit; coordination of other assembly, parts, inventory, packaging, or special shipping needs.

Because these many aspects of your supply chain flow through the oversight of your 3PL, they will have data and real-time updates on where your product is, when it’s being packed and moved, and when it arrives at its destination. These data points will give you the insights you need to alter or make changes to your supply chain logistics as needed, to maximize efficiency.   

3. Better Visibility = Better Decision-Making

A 3PL helps turn better supply chain visibility into better decisions.

Making the right decisions quickly is a challenge for supply chain management. It’s more than “where’s my shipment?” If a customer has 500 orders to fulfill, where are the 10 that are in jeopardy, or missing the customer’s expectation? Of those 10, which could cause you to lose a future sale?

Visibility helps drive the focus to the right priority and ultimately leads to the better decision. It also enables the best use of data to find the most efficient way to spend your transportation dollars. With real-time visibility, data is available to improve decision criteria for sales leaders and ultimately the buyer behavior of your final customer.

In addition, visibility of real-time rates for multiple services, modes, and options affords the flexibility to optimize customer requirements and your bottom line.

4. Industry Specifics

A good third-party logistics provider will help to better understand your specific needs and match them to proper supply chain resources.

For example, if you have an electronics company, chances are your products come with a lithium battery, known in the industry as a “dangerous good” that requires special handling and shipping. A 3PL that follows the regulations to ship such an item will mean they have the personnel, tools and experience to bring value to the way your products move through the supply chain.

Other examples of industry-specific needs might be consumer health products, medical devices, items requiring FDA compliance, perishable goods, and more. A 3PL need not have deep knowledge about the inner workings of your particular industry, though it helps. Rather what matters most in your relationship with your 3PL is how well they can provide  insight into your particular supply chain and give you guidance on how to maximize it to provide a competitive edge.

5. The Value of Experience

A valuable 3PL has focused experience where you need it within the supply chain.

We are all the sum of our experiences. Because a 3PL has experience moving different products in many industries to and from all parts of the world, they can provide insight and knowledge that their customers just won’t have.

Over time, a good 3PL will have learned and improved from their experiences.

The best logistics providers add superior value to your supply chain because “supply chain” is what a 3PL does. Their diverse exposure and experience in managing supply chain movements is a big part of what they bring to their customers. The 3PL’s experience, tools, scale contribute to that value.

Bottom Line

If you are looking for 3PL support, it may not be obvious what values a logistics provider can add to your business. The management of your supply chain should be the number one priority of any 3PL, and the ways in which they guide you to maximizing efficiencies should be abundant.  A solid relationship with your 3PL should help provide data, insights, and optimization of supply chain to provide you with the competitive advantage possible..

 

If you’re looking for help with outsourcing your order fulfillment, send us a note to connect about how we can help your company grow. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support.