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Third Party Warehousing Benefits – Full Service Outsourced Business Solutions

Small and mid-sized businesses often outgrow their current warehousing space and look to increase square footage. This is plausible sometimes, but not always. With growth often comes increased complexity, and in-house expertise on supply chain and logistics is often not present.

Increasingly, business owners and managers look to third party warehousing providers as they grow for several reasons.

Benefits of Outsourcing Warehousing and Logistics Operations

Here are several:

  1. a) They’re not in the business of warehousing and thus it is not a core function.
  2. b) Less staff to manage in the area of non-core operations means management’s time is spent on developing business and driving growth.
  3. c) Outsourcing inventory management and logistics service will often be an exercise that will uncover process improvement possibilities.
  4. d) The need for more storage space doesn’t necessarily mean the entire company and its employees need to relocate.
  5. e) Warehousing costs per square foot are cheaper than office space and the administrative (office) and warehousing functions are separable.
  6. f) Third party warehousing professionals are highly trained and it is their core function.
  7. g) Outsourced providers often wrap many value add services around warehousing services, including:
  • Pick, pack and ship services (direct to consumer – drop shipping).
  • Freight transport services
  • Inventory management expertise
  • Inventory management software (that often would require licensing fees to use or purchase)
  • Bonded warehouse facilities to shield duties for imports destined for foreign markets
  • Cost/price leverage
  • Value added services including sorting/kitting, plus accommodating other special warehouse-level projects using dedicated staff otherwise not available in house.
  • Staffing often includes management level supervision and accredited logistics professionals.

Small and mid-sized business (SME) managers like the efficiencies and professional services gained and often find that upon building a business case, partnering with a 3PL warehousing partner makes economic sense while boosting operational performance and efficiencies. Further, what is often viewed as an operational “pain” is now handled by professionals for whom you are the client. In short, you’re getting professionals in the field of service outside your core competency – allowing you to focus on your growth plans. In turn, you’ll likely have the logistics angle better covered.

For companies wanting to fast track growth and take a scalable approach, considering outsourced warehousing and logistics services can prove invaluable. With the potential realization of the above mentioned benefits, business leaders should invest the time to properly evaluate the achievable upside for their organization. Time and efficiency, after all, is money.

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