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Outsourcing—Far From Taboo

By: Elizabeth Abrams
Posted: June 3, 2010, from the June 2010 issue of GCI Magazine.

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Third-party logistics providers operate with much larger volumes than you, allowing them to offer substantially discounted shipping rates, some as low as 40% below what you may be paying. By outsourcing your logistics, you take advantage of their expertise and infrastructure, reducing your damages, shortening your lead times and cutting down on lost sales. Imagine being able to please a retailer that has been submitting purchase orders with increasingly shorter lead times. And with retailers reducing their inventories so significantly, that pressure isn’t likely to abate any time soon.

Once you find the right 3PL provider, remember to plan for the future. If sales go well and you find this move freeing up additional dollars for business development, you could well be in for higher shipping volumes. Outsourcing to a 3PL provider is not only a way to save money, but also a way to increase sales. Make sure you go with a provider that offers order flexibility, and also look for value-added services such as cross-docking, kitting and polybagging. Growth inevitably brings hiccups and the occasional odd request, so be sure to put yourself in capable hands to experience the smoothest business relationship.

And of course, remember to find a provider with the ability to back up your savings claims. A 3PL provider exists to serve you, so find one with dedicated customer service representatives who not only look out for your day-to-day needs, but work with you to determine your upcoming needs using their platforms for analyzing and forecasting. Managing in-stocks, expiring SKUs and on-time rates effectively is a key component to a successful supplier-provider relationship, and your company will love the ability to receive data-driven metrics at the drop of a hat.

Logistics is ultimately about speed and savings, and there comes a point in every successful company’s history where processes need to be improved in order to continue to compete in the marketplace. By looking at outsourcing as an extension of existing operations designed to save time and money rather than a risky outside venture, convincing your company to enlist the help of a 3PL provider becomes an easier task. And by selecting the right one, you enter into a fluid, flexible and faster partnership.

Elizabeth Abrams is the marketing associate at CaseStack—where she handles the public relations, advertising, marketing and business intelligence strategies for the growing provider of sustainable logistics solutions. A substantial background in journalism and advertising brought her to CaseStack, where she has worked since 2008.