5 Ways A 3PL Can Help Companies Operate Profitably

Many businesses see logistics as a cost center rather than a revenue driver. As of late, companies have been pushing logistics providers to become more efficient and reduce costs. However, playing the efficiency game may prove to be less profitable in the long term.

Cost reduction should be seen as just a portion of the force behind logistics operations. Strategic management of any supply chain needs to go beyond mere efficiency and into the area of creating opportunities for growth and expansion within the company. Here are a few 3PLs that can help a company operate more profitably:

Asset Utilization

By expanding logistics capabilities and taking a deeper dive into software applications, companies can position themselves for further growth into multi-channel distribution markets. Instead of continuously seeking out ways to increase productivity and reduce turn times, logistics providers should work with companies to seek out new ways to enhance the customer experience through valued-added capabilities.

Customer Profitability

Logistics providers have the ability to provide a thorough analysis of shopping trends and market fluctuations down to the individual consumer. This requires management of customer orders over multiple channels to track the profitability of an order through the entire supply chain. Following this model allows companies to focus on the current and future profits generated by a 3PL provider, rather than just expenditures.

Liquidation Logistics

The term liquidation has been around more many years. It refers to moving new merchandise that is surplus or inactive through alternative channels. In addition to recovering lost revenue, liquidating merchandise helps clear the supply chain of excess inventory. Companies and logistics providers who work together to develop strategies to liquidate excess inventory can realize an additional revenue stream and increased profitability.

Procurement Services

Today’s web-enabled procurement systems allow companies to streamline their supply chain and increase profitability. On-demand ordering of inventory reduces material investment, creates order optimization and improves product availability.

Sales & Marketing Focus

Companies who become dissatisfied with their logistics provider may have lost sight of the critical role 3PLs play in their overall success. In the past, many companies were operationally focused on fulfillment, but are now asking their sales and marketing teams to spearhead the relationship. This allows for a more profit-focused and customer-centric management of logistics providers.

Posted December 22, 2016