Traditionally, supply chain management – from product procurement to fulfillment – is handled in-house. But with the growing demand for eCommerce shopping, retailers must make the tough decision to either expand their operations at lightning speed or outsource their supply chain to a third-party logistics provider (3PL).
With so many factors to consider (and a lot of unknowns), it’s important to have all the information available before making a choice. So, in this post, we’re unpacking three major pros of supply chain outsourcing to give you an idea of what’s possible.
What are the Benefits of Outsourcing Supply Chain Management?
Supply chain management is the “man behind the curtain” in customer experience. It ensures that products purchased are packed and shipped in the fastest way possible. And it prioritizes cost-efficiency for the business. In fact, a majority of industry professionals (70%) predict that the supply chain will be a key driver for better customer service in a study conducted by Accenture.
As a result, any company you outsource your supply chain operations to should make it easier, faster, and cheaper to get your products where they need to be. Luckily, with the right provider, that’s exactly what you get. Here’s how handing off your supply chain logistics can positively impact your business.
Increase Your Efficiency
Even with the most streamlined processes in place, there’s always something to be said for partnering with a 3PL company whose primary focus is procurement and fulfillment. Not only can they get orders loaded into carrier trucks faster, but they also have the infrastructure and relationships needed to shorten shipping time.
This efficiency isn’t restricted to standard fulfillment methods, though. In fact, outsourcing can increase the efficiency of BOPIS, BOPAC, and ship-from-store fulfillment (SFS) as well by handing off order packing and picking to a dedicated fulfillment center and team.
Lower Shipping Rates
Negotiating rates with individual carriers isn’t just time-consuming. It’s also unpredictable, as prices can fluctuate based on demand and market trends.
One of the nice things about working with a 3PL is that those shipping costs are already locked in. And often, they’re lower than what you might see in a carrier bid. In fact, Radial offers access to the most competitive shipping rates out there – regardless of whether your customers’ orders need a delivery van, box truck, or international air travel. Our proprietary ShipQuik solution also enables you to get orders to your customers faster, by leveraging direct-line hauling.
Scale Your Fulfillment Operations
Peak season, blowout sales, and trending items all have the potential to put an unmanageable strain on your fulfillment team. Not because you’re missing the infrastructure to handle sales, but because every organization has its cap.
Fortunately, the threshold for 3PLs is much higher than for retail and eCommerce businesses, since their entire operation is dedicated to fulfillment space and processes. By outsourcing to a 3PL, you can scale your order management and fulfillment flawlessly, even during the busiest times of the year. This enables you to serve more customers and deliver an exceptional customer experience every time.
Outsourcing supply chain operations may seem foreign to many retailers, but it offers a lot of benefits. In fact, the retail and eCommerce businesses that adopt it will likely see increased efficiency, lower shipping costs, and fulfillment at scale.