Every company, from the smallest ecommerce venture to the largest multi-national corporation, has in place some or all of the logistics needed to operate the business. If they didn’t, they’d be a ‘former’ company fast.
But the number of in-house logistics that companies have is as varied as the different businesses themselves. It can range from outsourcing almost all your logistics, including procurement, warehousing and distribution, keeping only minimal logistics in-house, like order handling; to doing everything yourself, from raw materials to last-mile delivery.
While there are many responsibilities and risks in managing all or most of your logistics yourself, the simple fact that you ‘have it under control’ can prevent you from identifying those times when third-party logistics can still benefit your company.
Here are just a few of the times and situations that even companies with major internal logistics capacities can take advantage of the services of a third-party logistics company:
1. Open New Markets
Have you ever been on a summer road trip and found a great product, or even a chain of stores you like, but you just haven’t seen them back home? How come? If it’s such a great offering, why don’t they have it where you come from?
The answer might be partly because the product manufacturer or retail chain hasn’t taken advantage of third-party logistics to reach all their potential markets.
Local companies often have better ideas than the nationals, but they remain local because they don’t have the logistics to take their offering outside of the market they grew up in. Or at least they think they don’t have the logistics. A third party logistics company can help you have the logistics in place to take advantage of more new markets.
2. Be Faster to Market
So the R&D department has just emailed you to say that they’ve developed a better mousetrap. According to the old saying, now the world is going to beat a path to your door. But they can’t do that if you have no way to procure the raw materials and parts to build the mousetrap. Or can’t assemble and package the mousetrap. Or have no way to deliver the mousetrap to your customers.
So your choices are, somehow develop those logistics in-house, which might take so long that the world might be overrun with better mousetraps before you’re done. Or find a third-party logistics company who can have everything in place for you to ‘trap’ more business.
3. Meet Increasing Customer Demands
While not so long ago, end customers were willing to pay shipping charges and wait days or weeks for delivery, today they expect free delivery by tomorrow, and this afternoon would be better.
So just how fast can you get your products from your warehouses in the east to your markets in the west?
Wouldn’t it be great if you had a national warehousing and distribution network?
A 3rd-party logistics company not only can give you a national or international network of warehouses that make last-mile delivery shorter, faster and easier, but they will also have the distribution network to make it happen.
4. Be More Agile
Has your company ever given up on an opportunity because it was just outside your ‘core competency’? Of course, it’s wise to do what you do best, and not over-diversify. But rapidly changing markets, technologies, production processes and consumer preferences present lots of new opportunities (some people call it disruption). By making your company more agile and flexible, you will be able to take advantage of more of the opportunities that present themselves. A 3rd-party logistics supplier can instantly give your company the agility and flexibility that turns disruption into opportunity.
Regardless of how many of your logistics you manage in-house, there are lots of ways a third-party logistics company can help your business. Don’t let the fact that you have most of your logistics in place prevent you from taking advantage.