While your company probably isn’t in the logistics business, your supply chain probably determines your ability to stay in business. An efficient and effective supply chain keeps your stores full, customers happy and bottom line flush. One that doesn’t work, on the other hand, can put you out of business very quickly. Given the stakes, outsourcing your supply chain to third party logistics providers is a major step, but one that can give you significant benefits.
Leveraging Your Strengths (and Theirs)
Whatever your core business, you’re probably better at it than you are at the ancillary processes that you have to do as a part of running your business. After all, you probably wouldn’t expect a neurosurgeon to also be an ace accountant. This principle applies to your supply chain. The logistics providers that can take it over for you are good at one thing — logistics. This lets you stick to what you’re best at. As you do that, you improve in your core area while your 3PL provides a higher standard of service to keep your customers happier.
Greater Efficiency and Flexibility
With an in-house supply chain, you’re limited by the resources that you have to devote to it. Since logistics is, for you, a cost center, it’s likely that you will have a fixed structure set up to contain costs. Third party logistics providers, on the other hand, look at logistics as profit centers. They also usually have more resources of more types available to call on when your needs shift, making them more flexible. Finally, when you work with outside logistics providers, you can always switch if you do not receive the service that you need or expect. With your own infrastructure, you have to worry about terminating employees and dealing with capital equipment.
Access to Innovation
The logistics industry is one of our economy’s most innovative. Third party logistics providers pay close attention to the latest innovations so that they can deliver them to their customers. These innovations improve service reliability, achieve greater delivery speeds, lower costs and can also reduce the energy required to run a supply chain.
Outsourcing to a 3PL usually yields significant cost savings. First, the vendor takes responsibility for owning and maintaining the equipment and buildings needed to run the supply chain. Second, they pool the resources they use for you with other companies, letting them achieve greater economies of scale. Finally, they also reduce your administrative costs by handling the processes of employing workers, insuring equipment and all of the other support tasks necessary to run a supply chain.
Clark Logistics Services is one of St. Louis’ leading logistics providers. With decades of experience in America’s most convenient hub for supply chain activities, we help small and large companies optimize their logistics. Contact us to learn more about how our experienced staff can help your business.