The best supply chain management strategies are adaptable and resilient, especially during times of disruption. By working with a third-party logistics (3PL) partner your business gains visibility and transparency, resulting in significant cost savings.
Tim Proome, General Manager of Supply Chain Services, Tarsus Distribution
Previously, cost and customer service drove competitive advantage. Now that margins are tighter than ever and price drops are no longer feasible, optimising your supply chain to ensure accuracy of fulfillment and speed of delivery to the customer is critical to business survival and growth.
Visibility lies at the core of supply chain success today. Let’s say your business processes 4,000 transactions per day. The vast majority are processed without any issues. But what about those that aren’t? When an incorrect or damaged item is delivered to a customer, the cost to the business is not only financial but also reputational. Effective exception handling is vital to the supply chain. The ability to quickly identify and address issues ensures that problems can be tackled and disruptions avoided. The results are improved services and response times, speedy deliveries, and greater reliability, all of which translate to satisfied customers.
Working with a 3PL partner is one of the major ways that you can reduce logistics costs for your business. Outsourcing allows you to have predictable, controllable costs. You can also save on the huge infrastructure investments required to hold stock, as a 3PL company will provide transport, warehouse space, staff, and warehouse management technology.
In addition, the inventory you have on hand today may not be the inventory your customers want tomorrow. In today's world, it’s worth asking why your business would want to hold onto any stock at all. The most competitive companies do not – they reduce stock holdings by outsourcing that part of the business to the 3PL partner. This reduces stock holding costs and potential stockholding losses.
Manual processes and outdated software programs put your business at risk. A 3PL partner should have a warehouse management system that guides inventory receiving and put-away, optimises picking and shipping of orders, and advises on inventory replenishment in real-time. This is an enormous advantage that allows for greater control over the entire supply chain.
Reliable and up-to-date sales information, shipping data, and other key performance indicators will help you predict when you will need to reorder supplies and track trends and issues that can help drive purchasing guidelines. The result is shelves stocked with the right items, and customers happy with their orders.
In short, the right 3PL partner makes it their business to manage costs and drive efficiencies in ways that you might not be aware of or unable to do yourself.
Click here to read more about the Tarsus Distribution Supply Chain Solutions.
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