We have seen quite a lot of posts talking about the importance of outsourcing logistics services to a third-party company. We also saw what factors to consider when choosing a service provider. Factors such as services provided, warehouse location, size, number of employees, the technology and equipment used, insurance cover, security systems, a fleet of vehicles, distribution network, etc. are commonly taken into consideration.
While flexibility and scalability are mentioned on the list, not all enterprises give them much importance. There could be many reasons for this. The enterprises may think that it’ll take a long time to expand the business and that there is no point in choosing a bigger service provider until then. Also, scalability is measured in terms of money, where enterprises feel that they might have to pay more to outsource the services to a well-known large scale service provider.
This is mostly because enterprises, especially the smaller ones tend to focus on short-term goals and immediate returns. Even when the business aims to double or triple the ROI in the long term, it doesn’t think of using support services to substantiate this goal. However, enterprises are not entirely wrong in their approach. A bigger service provider may not be as flexible as the smaller one is. Balancing between the two factors is crucial if an enterprise wants to get the best out of the deal.
In this blog, we will discuss why it is important to focus on the scalability and flexibility of logistics provider services when choosing a 3pl warehouse in the USA and how enterprises can find a service provider capable of providing the exact services.
Things to Ask from a Scalable Logistics Service Provider
Data Integration- Latest Software and Technology
Neither the enterprise nor the company can work effectively without data. From knowing the volume of production to the number of orders placed, and the remaining stock in the warehouse, everything is data. This data is shared between the two parties, usually via the cloud. But for that to happen, the warehousing company should be using the latest software such as warehouse management system and cloud hosting services to store the data on the cloud. As the volume of work increases, the volume of data will also increase, and so will the demand for the use of advanced IT systems.
Support Services
Logistics services are not limited to the physical aspect of the work. The company also assists in planning and decision-making. It helps answer questions like whether the enterprise is equipped to increase production, enter new markets, and to attract a different base of the target audience.
Distribution Infrastructure
If the service provider cannot add new networks to the distribution channel, add more fleet, or transport the shipments to various destinations, it can hardly claim to provide scalable services. The top 3pl companies are always working on improving their distribution network and infrastructure so that they can always be ready to take up any challenge that comes their way.
Long term Partnership Plans
Even though the contracts are limited to a year or three, enterprises should choose a 3pl service provider company with which they can continue the deal for a longer period. Renewing the contract with the same company even as the business volume increases is profitable when compared to searching for another service provider once every few years.
Past Experiences and Success Stories of Scaling
Enterprises should make it a point to ask warehousing companies how they helped their previous and existing clients in managing the increasing demand for the products. Rather than talking about how it can be done, the company should be able to show how it was done and how the client benefitted from the move.
Things to Ask from a Flexible Logistics Service Provider
Customization of Services
What’s flexibility without customization? In today’s world, we cannot expect one solution to fit all needs. A 3pl company that doesn’t offer customized services for procurement, warehousing, order fulfilling, distribution, and reverse logistics will not be of much use to the enterprise.
Agility and Mobility
The 3pl warehouse in the USA has to be able to adapt to the constantly changing requirements and demands in the market and that of the enterprise and customers. If the company has a long approval process, it will invariably lead to a delay in delivery. This could cause dissatisfaction in customers who prefer to get the products as soon as possible after placing an order. Customer dissatisfaction will lead to a decrease in sales and affect the ROI of the enterprise.
Enterprises can talk to the reputed 3pl logistics provider to understand the intricacies involved at different stages and how the company is prepared to handle the issues without compromising the quality of services or increasing the cost of services.
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