Outsourcing your warehousing and distribution can lead to many benefits for your business, such as reducing costs, increasing efficiency, and improving customer satisfaction. However, as an operations director or CEO, it’s important to ensure that certain aspects of the process remain within your control, in order to achieve the desired results. At Elite Sourcing and Logistics, we hear too often about outsourced solutions that claim to manage many of the following operations for a business, only to find failure leading to upset customers.
One of the most critical areas to consider is carrier selection. Choosing the right carrier is crucial for ensuring timely deliveries, maintaining customer satisfaction, and keeping costs under control. Similarly, optimizing your routes can help to minimize transportation costs and improve delivery times. We are very transparent about this process and require that our customers manage carrier selection to reap the many benefits not typically available in a 3PL environment.
Let’s take a closer look at why these factors should be managed within your business.
Carrier Selection:
When outsourcing your warehousing and distribution, it’s important to have a say in the selection of carriers that will be used to transport your products. This is especially true if there are particular carriers you’d like to work with, or if you want to ensure that your products are being transported in a way that aligns with your brand image and values.
It’s also important to have control over how carriers are chosen and managed to ensure that they meet your standards and expectations. When you outsource this selection completely, you can no longer dictate how and when products are delivered to retailers. You can also create pricing agreements with your carriers, then work with third-party logistics providers (3PL) like Elite, who always encourages and honors these agreements.
Route Optimization:
Optimizing your routes can help to reduce transportation costs and improve delivery times. However, this can be a complex process that requires careful planning and monitoring. Outsourcing your warehousing and distribution doesn’t mean giving up control over this process.
By working closely with your 3PL, you can ensure that your routes are optimized in a way that’s aligned with your business goals. This might involve changes to delivery times, modes of transportation, or even the locations of your warehouses or distribution centers. Flexibility is the key factor here. This is one main area where we excel at Elite Sourcing and Logistics, with many of our clients reporting gratitude for meeting last minute needs to shift product distribution to meet demand.
Transportation Costs:
One of the primary reasons businesses outsource warehousing and distribution is to reduce costs. However, by keeping transportation costs within your control, you can monitor spending, identify areas for cost savings, and negotiate with carriers to ensure that you’re getting the best possible rates. This can have a direct impact on your profit/loss and gross margin calculations, which could also signify when new production and/or pricing strategies may be needed.
Maintaining Brand Image:
When outsourcing warehousing and distribution, it’s important to ensure that your products are being delivered in a way that aligns with your brand image and values. This includes everything from the carriers that are used to the way that products are packaged and labeled. By selecting and monitoring the transportation providers in your supply chain, you can know that product pallets, kitted displays, and even packaging materials are all delivered in quality condition. By maintaining control over these factors, you can protect your brand and ensure that your customers are receiving the quality of service they’ve come to expect from your business.
Outsourcing your warehousing and distribution can be a smart business move, but it’s important to remember that certain factors should remain within your control. Carrier selection, route optimization, and transportation costs are all critical areas to consider, as they can impact your bottom line and your brand image. By working closely with a 3PL, like Elite Sourcing and Logistics, and maintaining control over these factors, you can ensure that your outsourcing strategy aligns with your business goals and objectives.