If you run a growing business with increasing sales volumes, sooner or later you will face a tough decision to either outsource your distribution or take care of it in house. There are a lot of factors to consider including time, cost, and expertise. As your business expands, it’s often better to focus on the core competencies of your brand and leverage a 3rd party logistics partner for activities that require specialized resources and knowledge.
Here are the top 7 reasons to outsource your distribution to a 3rd Party Logistics Partner
1) Focus on your Core Business
As your business expands, the process of shipping and distributing products can become increasingly cumbersome. The time and energy invested in these operational aspects could be more effectively utilized by focusing on sales and fostering the growth of your brand. Instead of dealing with the challenges of locating and operating distribution facilities, establishing and executing supply chain processes, overseeing warehouse labor, implementing and supporting IT systems, and organizing transportation routes, businesses can opt to collaborate with a seasoned 3PL partner. This allows them to shift their focus to strengthening and advancing their brand, while the 3rd party logistics partner manages the intricacies of the distribution process.
2) Cost Efficiency
Collaborating with a 3PL partner can yield cost efficiencies by capitalizing on economies of scale. The 3PL partner will devise and execute processes aimed at minimizing resource wastage, thereby enhancing the efficiency of your supply chain. This involves optimizing the utilization of assets, managing inventory, refining shipping procedures, and controlling labor costs, among other distribution-related expenses. Achieving such efficiencies demands specialized resources and a depth of knowledge in supply chain dynamics, often beyond the reach of in-house capabilities.
3) Leverage Expertise of Third-Party Providers
Leveraging the expertise of third-party logistics (3PL) providers is valuable, given their specialization in supply chain management, extensive industry experience, and established partnerships. Outsourcing to entities like SCI allows businesses to access a wealth of knowledge. These third-party providers boast well-equipped facilities and a profound understanding of logistics management. Collaborating with them can lead to enhancements in crucial performance indicators, including delivery times and inventory accuracy.
4) Scalability
Outsourcing provides a scalable solution. When you outsource distribution, you have the freedom to increase or decrease your operations in response to seasonal changes or shifts in market demand. This flexibility comes without the requirement to invest in extra infrastructure, workforce, or technology. Companies such as SCI can adapt their resources to align with your evolving requirements. This enables your business to grow without sacrificing customer satisfaction.
5) Access to Additional Value-Added Services
Tasks such as assembly, kitting & packaging, labeling, and inspections can be time-consuming, labor-intensive tasks for small to medium businesses. When the amount of time and money spent completing these tasks makes it difficult to complete the day-to-day tasks of running and growing your business, it is time to consider using a third party.
Whether you are shipping standard stock or providing customized subscription kits, a third-party logistics provider can execute the kitting process quickly and accurately, adding personalized touches. SCI’s services contribute to streamlining and optimizing operations by minimizing touchpoints, reducing transportation costs, and lowering the risk of product loss or errors. We are also adaptable to align with your brand’s vision, ensuring a perfect unboxing experience. Our agile kitting services make it easy to include special messaging, promotional inserts, unique tissue paper, and more.
6) Strategic Locations
The efficiency of distribution is significantly influenced by the location of your third-party provider. Optimal distribution centers in centralized areas with convenient access to major transport routes can cut down on logistics costs and enhance delivery times. Third-party logistics providers equipped with an extensive network of warehouses and a well-designed distributed order management system can also fulfill orders from facilities nearest to the customer, ensuring quicker delivery.
SCI strategically operates in key locations throughout Canada and maintains a partner network across North America, enabling us to provide comprehensive logistics solutions spanning coast-to-coast and across borders.
7) Logistics and Last-Mile Delivery, from One Integrated Partner
Some 3PLs, including SCI, offer combined logistics and transportation services. Bringing together your logistics and transportation needs with a single partner ensures a smooth, end-to-end view of your orders—from the warehouse to delivery—thanks to fully integrated technologies.
SCI’s quality transportation partner network with seamless multicarrier, multimode carrier performance management guarantees reliable, fast delivery while managing supply chain fluctuations, peak capacity, and everyday route disruptions. Our real-time, step-by-step tracking provides on-time performance and transparency throughout the delivery nationally and cross-border.
Conclusion
In summary, outsourcing distribution can provide numerous benefits — cost savings, access to expertise, flexibility, improved customer service, additional services, focus on core business, and strategic locations. It’s a smart strategy for businesses looking to improve efficiency, reduce costs, and drive growth.
A strategically selected logistics company can help your business develop better customer service while letting you focus on building your brand. 3PL experts are already familiar with the most efficient logistics solutions for your business; they have teams dedicated to enhancing your supply chain. If you are thinking of partnering with a 3PL provider, contact one of our experts and discover how you can benefit from our supply chain solutions.
