Warehousing and distribution form the integral part of a logistics strategy of any company that requires stock keeping in bulk, be it a new startup or a well-established company.
Warehousing is a process of storing raw, semi-finished or finished goods in bulk that have to be distributed or sold later in time. Warehouses are usually required by producers, manufacturers, distributors, wholesalers, retailers and e-tailers. While distribution refers to the inbound and outbound movement of the goods stored in the warehouse.
3PL Warehousing and Distribution – Introduction
While there are companies who have their own warehouses and distribution facility, there are many others who prefer storing their goods in an external warehouse, a third party warehouse – this is called 3PL warehousing.
Warehousing in itself is an elaborate process that requires dedicated resources – investment, staff, technology and an efficient plan including distribution; therefore several companies choose to outsource their warehousing and distribution to a third party warehousing expert like ProConnect Integrated Logistics, so that they can focus on more crucial aspects of business. There are several factors that can help you choose the right warehouse; let’s look at why you should consider outsourcing in the first place.
Top Reasons You Should Outsource Warehousing and Distribution to a 3PL
A 3PL (third party logistics) is a logistics company provides warehousing, global shipping, local distribution, door to door delivery and customs clearance services to its clients. 3PL companies are experts in handling a part or the entire supply chai for your goods, right from procurement of raw materials to delivering to the right customers.
Appointing a 3PL (third party logistics) company for warehousing has tons of advantages, as they already posses the expertise, resources and distribution capabilities.
- Tried and tested Processes – As warehousing and distribution experts, a 3PL will already have defined processes to streamline and co-ordinate the storage and delivery of your goods in an effective manner. Therefore, you can rely on their processes rather than creating and testing your own. On the other hand, if you already have some processes defined, a 3PL company might be flexible to adapt your processes as well.
- Experience, Expertise and Reliable Service – Warehousing and distribution when done right, result in customer delight and satisfaction. Not all companies have warehousing experts in-house. Instead of appointing an expert in-house, a company can turn to specialists who have the expertise and experience in the field along with tried and tested workflow and processes in place.
- Updated Technology – Technology aids the efficiency of warehousing and distribution. With new technologies coming in every now and then, it is hard to keep up at low budget – this is where outsourcing 3PL warehousing and distribution shows its benefits. A good 3PL will have all the required technologies like a WMS (Warehouse Management System), RFID, etc. that will give you timely reports and enable you to track your inventory in real time. In short, you will keep up with the latest technologies.
- Flexibility to Scale Business – When expanding your business in new markets or with new products, you will need to make some changes in inventory and transportation as well. It is difficult to estimate the additional warehouse space or distribution requirements in such scenarios. Outsourcing warehousing and distribution takes the burden of additional costs off your shoulders and lets you concentrate on managing your inventory levels and distributing your products timely. Businesses also require to make these changes when experiencing a shift in seasonal demand, which would require them to either scale up or scale down their storage and distribution, which again removes the burden of additional costs for the company.
- Simplified Shipment Consolidation – If your cargo requires consolidation, breakdown or packaging to turn into a final product, a 3PL company can help you with this as well. Multiple shipments can be received in a single location, consolidated and then can be dispatched to different locations in a systematic and timely fashion. Since a 3PL is expert in transportation as well, appointing them for a suite of services can make you bargain for further discounts.
- Stock Analytics – A 3PL company like ProConnect can also provide you insights into your inventory and help you recognize which of your SKUs are performing better than the others. These insights will further help you understand customer buying trends and review your strategies of stock production, inventory and distribution. Not only this, a 3PL company can also work on sharing customized reports with you as per your requirement.
- Low Capital Expenditure – Own warehouse and distribution setup requires large space, workforce and infrastructure, which calls for a huge capital investment. Outsourcing these two functions can result in instant cost saving. Not only that, you can convert this fixed cost into a variable expense for your business.
Should You Choose a 3PL for Warehousing and Distribution?
Many companies are increasingly looking for a 3PL warehousing partner, as it lets them concentrate more on their business aspects, leaving the storage and distribution headache to the experts.
If you are looking to evaluate a 3PL company for your warehousing and distribution efforts, evaluate ProConnect Integrated Logistics. With 21 warehouses in UAE and Saudi Arabia, we have established its presence in the region with some of the top industries. Enquire with us today.