Running a business has arguably never been more complex. Not only are operations dealing with persistent supply chain disruptions and shifting consumer expectations. They are also trying to manage warehousing, transportation and last-mile delivery in one of the most volatile logistics markets in recent memory.
On top of all of this, escalating operational costs and the need for advanced technology are stretching internal teams thinner than ever. Trying to be an expert in everything diverts focus from your core business goals.
All of this equals a giant headache for operations. But there is a solution. Partnering with a third-party logistics (3PL) provider can help mitigate these challenges, create efficiency and get your operation back on track.
What is a 3PL?
A third-party logistics (3PL) provider is an outsourced partner that manages a company’s logistics operations, which can include things like warehousing, inventory management, freight transportation and fulfillment services.
This is different from managing logistics in-house, where you own or lease warehouse space, manage your own staff, and negotiate your own carrier contracts. A 3PL consolidates these complex functions under one roof, leveraging its expertise, established networks and technology.
For example, a 3PL partnership means your staff is managed based on the volume of orders you need to ship, the inventory that needs to be stored and picked and the freight that needs to be moved—not just on maintaining a static headcount.
A strong 3PL offers complete accountability within your supply chain and increases output while meeting service-level standards.
But what are the specific ways a 3PL can help with scalability and rising costs?
Scale efficiently and control costs
Some key benefits of a 3PL partnership, especially during market volatility, are flexibility and cost predictability.
Regardless of demand swings, be it a seasonal peak or an unexpected downturn, a 3PL scales your labor and space up or down based on your needs. You pay for the resources you use, not for fixed overhead during quiet periods. This means that despite volume variance or market changes, your costs align directly with your output.
Businesses that partner with a 3PL can often reduce their logistics costs by leveraging established carrier rates and optimized warehouse operations. This can be critical right now when inflation pressures margins and customers demand faster, cheaper shipping.
Gain expertise and technology without the investment
The logistics industry is driven by technology. From Warehouse Management Systems (WMS) to transportation optimization software, the tools needed to compete are expensive and require expertise to implement and manage.
A 3PL takes on the responsibility and accountability of this technological burden. We provide the infrastructure, software and seasoned experts to manage it, relieving you of the massive capital investment and operational strain. This gives you access to enterprise-level logistics technology without the enterprise-level price tag, creating predictability and a competitive edge.
Navigate labor challenges and turnover
During unexpected peaks, high turnover in warehouses becomes a huge risk. The pressures of quick turnaround times can lead to overworked employees, safety concerns and rising costs.
Couple that with a competitive labor market and you have the recipe for operational disruption. You may be able to fill positions, but it takes time to recruit, hire and train new staff to be efficient—reducing your productivity even further at a critical time.
With a 3PL partner, the provider takes on the full responsibility of finding, training, and managing a high-performing workforce. Your partner ensures your service levels are met, and your cost structure is designed to absorb these challenges without surprise invoices. New associates get up to speed faster without any risk to you of money lost or service failures.
SIMOS is your trusted 3PL solution
As businesses are struggling with production challenges and need to do more with less, SIMOS Solutions can help you increase productivity, lower costs and improve worker retention.
That’s a triple-win for your business. Our custom solutions are built on driving performance—so you only pay for the work completed, period—and can flex to help you meet changing demands.
With our solutions in place, you can focus on making the best product—we’ll take care of the people.
Performance-Based Staffing: Our solutions are engineered to drive performance in the most efficient ways possible—not to fill hours.
Rapid Workforces: Get quality talent you can count on, fast, with onsite management and transparent pricing.
Engineer On Demand: Finetune your operations under the expert eye of our experienced in-house engineers.
Visit us at www.simossolutions.com to learn more about what a 3PL performance model could do for your operation.
