Tim Proome, General Manager of Supply Chain Services, Tarsus Distribution
Supply chain visibility is critical to the success and continuity of every business. In today’s competitive market, customers are less likely to tolerate delays and delivery errors. Here are three reasons how outsourcing your supply chain service solves these problems.
Outsourcing to third-party logistics (3PL) experts can drive down costs, give the business access to expertise and experience it may not have internally, and allow it to focus on core competencies.
A Deloitte study on supply chain leadership found that 79% of businesses with highly efficient supply chains enjoy greater than average revenues compared to others in their industries. In addition, businesses with optimised supply chains have lower supply chain costs and keep only 50% of their inventory holdings compared to businesses with sub-optimal supply chains.
Warehouse storage space is expensive whether you rent or own it. There are also staff costs, rates and taxes, forklift and racking costs, and a host of other warehouse management expenses. With outsourced warehousing, you have the benefits of a shared resource. The staff, equipment, and systems needed are all provided, saving the business significant amounts of time and money.
Another advantage of outsourcing to a third-party logistics company is reduced retail theft. Removing excess stock from retail premises can help to mitigate the risk of armed robbery and the insurance headaches that repeated incidents can cause.
Access to expertise
Thanks to our daily exposure to digital technology, smartphones, and ongoing technological advances, business-to-business (B2B) customers now expect the real-time interaction they receive as business-to-consumer (B2C) customers on e-commerce platforms.
They are demanding high levels of delivery visibility that come at significant cost and requires both human and technical resources. 3PL providers have a ready-made, fully automated Warehouse |Management System (WMS) that will keep customers in the loop every step of the way. Your business will have access to a superior, digitised back-end, enabling you to differentiate your customer journey and provide real-time responses at a fraction of what it would cost the business to do this itself.
Focus on core competencies
If day-to-day warehouse management and logistics tasks are taken off your hands, your business can focus on more profitable core competencies. This also provides an opportunity to further boost efficiency and profitability.
In 2016 we built a world-class warehouse management system. This offering is available to our customers so they may fully utilise the infrastructure and meet market needs.
We onboarded our first 3PL customer within three-and-a-half months. The company was a consumer electronics and IT retailer. They were growing their online platform, but finding that dispatch and delivery were taking too long, causing customer dissatisfaction. We took over their warehousing, logistics and distribution to more than 70 stores countrywide. Our team then optimised their replenishment analyses inventory levels by automating. All of this improved lead times and stock re-orders to exceed sales needs at all branches. This customer still partnered with Tarsus Distribution and continues to grow their business on this success.
If a 3PL provider can do it more efficiently than you are able to, it’s worthwhile considering the benefits that a partnership could bring you and your business.
Click here to find out more about Tarsus Distribution’s Supply Chain Solution and how it might benefit your business.