3PL: a smarter way to manage logistics

When a business has decided to outsource their logistics needs to a third-party logistics (3PL) supplier, how the two companies decide to work together will have a large influence on the overall success of the venture. The needs of the logistics function range from warehousing and transportation management to complex integrated systems. So, why choose to outsource and how can in-house functions and retailers successfully manage their relationships with 3PL?

The benefits of outsourcing to 3PL

In this fast-paced market, consumer buying, spend and expectation is driving pressure in the supply chain where adding value can often become difficult. 3PL can very often help to overcome these challenges and add a competitive advantage to your business.
Cost efficiency
 
Cost efficiency is arguably one of the most compelling benefits of partnering with a 3PL supplier. Instead of paying for an entire facility dedicated to inventory that often fluctuates, for which cost-to-store per product is inefficient, 3PL allows multiple customers to share the burden of labour, space and transportation costs. Some 3PL suppliers have facilities that house products for multiple customers, each with its own space tailored for the customer and product’s needs. These multi-user facilities allow customers to pay for only the space they use—a critical advantage for companies that cannot fill an entire warehouse all year round—improving return on invested capital. 
Flexible working spaces
 
The ability to adjust warehousing space when inventory fluctuates is another huge advantage of leveraging 3PL. This scalability of space and labour allows customers to be flexible with their inventory during routine shifts in supply and demand, product launches or during seasonal ups and downs. Outsourcing critical warehouse functions provides peace of mind, reassuring companies of all sizes that they can adjust their product flow when needed. If a company owns and operates its own facility, it may experience financial losses at the mercy of any of several factors influencing product supply, demand or availability.
Accountability and transparency
 
Not all advantages of 3PL are visible. One intangible but equally valuable benefit of third-party warehousing is the individual attention global 3PL can provide, resulting in increased accountability and transparency in the storing and distribution of products. Instead of multiple people managing product flow from several suppliers all over the world, partnering with a global 3PL supplier allows companies to reduce the number of touch points required to manage an effective supply chain.
Shared solutions
 
Other frequently overlooked benefits of outsourcing warehousing to 3PL include leadership and shared investments, which can be important for complex industries. As 3PL suppliers build solutions for an array of problems, all their customers will reap the benefits. Some solutions, for example, require investments in system operations upgrades and IT improvements. This means that you will also benefit from investments and upgrades that your 3PL supplier has designed for their other customers, if appropriate.

Hiring talent to manage your 3PL relationships

The people on your team, are key. Knowing the key skills necessary to build a strong team for your function is fundamental to this. Human capital is what drives the customer experience and is your most valuable asset – invest wisely.
When looking for people to join your team it is always great to start by exploring a candidate’s understanding of what it means to be a great supplier. A positive, can-do attitude in the role can make all the difference. In addition to this, there are key aspects of a potential candidate’s capabilities that should be considered.
  • Level and type of experience in the sector.
  • Ability to influence key stakeholders.
  • Understanding the challenges in the marketplace. 
  • Communication style
Challenges and obstacles are a fact of a supplier/customer relationship but as long as these are communicated well in advance (both problem and solution) by an experienced professional then these can be resolved.  
At Michael Page Logistics, we pride ourselves on our ability to offer a bespoke service to our clients. To ensure we find the right people to fit our clients’ needs, it is important for us to place ourselves in their shoes, understand accounts and demonstrate credibility through capability. We aim to meet with our clients face to face and arrange a tour of their logistics operation to get a real understanding of how their site works and a feel for the operation/culture. This ensures we can add real value to the recruitment process. 
If you would like to explore how we can help you find the right people to join your team, why not get in touch with your local Michael Page office for a confidential conversation? Alternatively, you can submit a job spec and well give you a call to discuss your hiring needs.
Charlotte Moore
Manager, Michael Page and Page Personnel Logistics
T: +441142636007