Should you outsource warehouse management?
January 31, 2020
The close of the fourth quarter puts many businesses in assessment mode. How did they handle the holiday crunch or ramp period? What's around the corner? If they're in growth mode, can their current resources handle the strain of expansion?
These questions are difficult to answer, but they're essential for forward-thinking business leaders. To ensure smooth expansion, enterprises must work proactively. Delays and hiccups in the supply chain will stifle growth.
With all of that in mind, you may be wondering whether it's time to outsource your warehouse management functions. Here's what you need to keep in mind as you make this crucial decision.
What is 3PL?
You may have heard the term 3PL tossed around, and you might not be sure exactly what it means. 3PL stands for "third-party logistics," and it's a sort of an umbrella term used in the field of logistics for outsourced warehousing, fulfillment, packaging and shipping companies.
Newer companies with small footprints often begin by keeping all of these functions under their roof, but 3PLs are huge.
As a matter of fact, research firm Armstrong & Associates estimated that the current global 3PL market
hovers around $951 billion.
Some 3PL companies specialize in one specific operation, like shipping or warehousing, while others provide full-service logistics capabilities.
How do I know if I need a 3PL provider for warehouse management?
If you reflect on your previous year and you notice challenges that overburdened your current resources, forcing you to turn your attention away from your business's core competencies toward logistics, it might be time to outsource warehouse management.
You might not even have noticed any hiccups yet. However, if your organization has plans that require you to grow the volume of goods you handle or the geographic footprint of your operation, and you don't have the in-house expertise needed to quickly facilitate that jump, then a 3PL can help you save time and cut costs. They'll also enable you to keep your attention tuned to the kind of innovation that has powered your success so far.
Look for these features in your warehouse management 3PL
If you think it's the right time to weigh your options for an outsourced warehouse management partner, there are several factors you'll want to consider. Investigate these features to find the right partner.
To determine the reach of your warehouse management 3PL, find out how many warehouses they have, where they're located, and how much each center can handle. Their facilities need to be located where you need them now, and they need to be able to meet your current requirements, plus your ambitions for scaling.
Who is your point of contact at the organization? How involved are they in the day-to-day operations of the material handling? Can you trust them to adequately troubleshoot and pivot to meet your changing warehouse management needs?
Is your 3PL adequately equipped to handle the unique inventory needs for your industry? If not, they can cause delays in your supply chain that really impact customer experience. For instance, Atlas Logistics specializes in the handling of furniture, fixtures and equipment (FF&E) as well as operating supplies and equipment (OS&E) in a variety of different industries.
You'll expect your outsourced warehouse management company to handle your materials safely, which will limit any risk to your inventory. Unfortunately, no solution is 100% safe, so insurance is essential. Look for companies that will insure your goods at replacement value, as opposed to actual cost.
You may not want a whole lot of bells and whistles as long as your warehouse management is competent, secure and reliable. Still, 3PLs that provide value-added services demonstrate that they are partners in your business model and they're willing to go the extra mile to assist their clients. Look for warehouse management solutions that provide value-add services like dock releases, uncrating and inside placement.
To find out how Atlas Logistics can help you meet your warehouse management needs or provide other 3PL services that benefit your company, request a quote