Outsourcing warehousing and storage to a third-party logistics (3PL) provider can be a wise strategic choice for a business. It allows the company to focus on its core competencies while leaving inventory management to the experts. However, simply signing a contract with a 3PL isn’t enough. Businesses must actively engage with the 3PL to reap the full benefits of the partnership.
Are you getting enough value from your 3PL partnership? Here are seven tips to help you maximize the value of your outsourced warehousing and storage.
Use Their Data
3PLs have a wealth of data about your business. They can track your inventory levels in real time, know order statuses and fulfillment rates, and could even have vital data to help with your forecasting. Put that data to use.
Your 3PL will happily share this information with you. Take full advantage of it. Use live inventory updates to help prevent stockouts and overstocks. Integrate data with your internal software to make data-backed decisions. The more you use this data, the smoother your operations will work.
Set Key Performance Indicators (KPIs)
A 3PL acts like an extension of your business. Like any other part of your business, you should measure its performance with clear and measurable KPIs. These metrics can help you gauge the value of your 3PL and ensure they are meeting your expectations.
Consider tracking KPIs such as:
- Order accuracy rates
- Turnaround times
- Inventory accuracy
- Fulfillment speed
Regularly review these metrics to identify areas of improvement and hold the 3PL accountable for the results.
Conduct Regular Site Visits
We might be living in the digital age, but there’s still value in a physical visit. Regular drop-ins allow you to assess warehouse operations firsthand. You’ll see whether the reality aligns with your expectations, such as whether the space is clean, safety measures are followed, and materials are handled correctly. It’s also worth the opportunity to strengthen the relationship with your 3PL provider.
Prioritize Communication
Communicate, communicate, communicate. The more your 3PL knows, the better they can act on your behalf. Establish regular touchpoints, such as monthly phone reviews or quarterly in-person meetings. Use this time to keep everyone on the same page regarding goals, challenges, and upcoming needs. Open communication can make the supply chain a lot more seamless.
Avoid Unnecessary Costs
Warehousing costs can add up quickly if businesses aren’t proactive about moving inventory. Work with your 3PL to assess inventory levels and identify opportunities to liquidate overstock. Use discounted sales, bundling products, or other clearance strategies to free up warehouse space and reduce storage expenses. Being proactive about cutting costs will help keep warehousing expenses down and improve your bottom line.
Include Them in Forecasting
Provide your 3PL with forecasting reports and inform them about upcoming promotional activities, market trends, and anticipated demand spikes. When a 3PL knows about upcoming changes, it can allocate resources more efficiently to meet your needs, including staffing, storage, and transportation requirements. This can help them meet demands without disruptions.
Use the Full Scope of Services
Many businesses underuse their 3PL providers. Beyond basic warehousing and storage, 3PLs can provide kitting, repackaging, reverse logistics, recycling, and more. Taking advantage of these services can help streamline your operations and improve your efficiencies. For example, you might use their kitting services to bundle products for a promotion or use their reverse logistics to manage returns more effectively. Explore their services to see if more value is available for your business.
Looking for Reliable Warehousing and Storage?
If you are looking for a reliable 3PL provider offering comprehensive warehousing and storage solutions, Beitler Logistics Services is here to help. We’ve been offering warehousing services for over 50 years, working with businesses of all sizes and industries to create tailored storage solutions. With a team of logistics professionals, we can help you maximize value in your supply chain.
Learn more about our warehousing and storage services by contacting us today.