11 Ways 3PLs are Helping Retailers & Manufacturers Today

Today, 3PLs have taken on a much wider role in the supply chain industry, that of collaborative partner. Acting as an extension of their clients’ businesses, 3PLs bring considerable expertise to reduce supply chain/logistics costs and to provide a broad array of value added services from enhanced customer service, inspections, refurbishments and recycling of returned goods to kitting and assembly. These added services enable their clients to operate leaner so that they can better focus on their core mission and expertise rather than on transactional activities in which 3PLs already have specialized expertise.

Expanding the 3PL-Client Relationship with Value Added Services 

Value added services now run the gamut. To help customers increase shipping efficiency, some 3PLs now offer packaging design services. This can help reduce carbon footprint, aid with warranty management issues and enhance the efficiency of shipping.  Other services relate to the specialized expertise of the 3PL.  Clients of 3PLs often value their global expertise to aid with customs regulatory issues and international documentation as well as duty optimization and freight forwarding.

Because of the breakneck pace at which today’s retailers and supply chain runs to service consumers, retailers and manufacturers need all the help they can get to save money and get goods on the shelves and into consumers’ hands. Never before in the history of the world have consumers been more impatient.  Today’s consumers arrive at brick and mortar stores armed with volumes of information they have collected by using Smartphones, tablets, computers and other devices connected to the Internet.  By the time they get to the store, they have typically read peer reviews.

These multiple methods that consumers use to research, shop for and connect with brands is known as omnichannel retailing.  The consistency of the consumers’ brand experience across the various platforms and brick and mortar store is critical.  Typically consumers relate their brand experience to how long it takes to get the goods into their hands.  Related to this are supply chain and logistics processes and concerns.  Not all infrastructures are ready for omnichannel retailing.  Is yours?

3PLs often act as the face of the retailer, providing customer service support, processing returns and conducting other activities on behalf of retailers, both e-commerce and brick and mortar.  These consumer-facing services need to be seamless representations of the brand experience.  3PLs can be ideal partners when dealing with omnichannel retail concerns.  They can establish a common inventory system across all the various channels and use a common system to determine which channel from which inventory will be pulled, based on necessary parameters such as delivery methods and zip code.

Here are a Few of the Ways in Which 3PLs Help Retailers and Manufacturers

3. 3PLs can help scale operations, upward or downward to meet seasonal demand or the aggressive growth spurt of a business.  Outsourcing to a 3PL enables its clients to have more control over their business without the delays and hassle of hiring and training workers.  This is especially important for seasonal businesses as well as for companies that are growing in specific geographic areas.  Outsourcing also reduces the outlay of capital for facilities, software such as warehouse management systems, telephone and Internet, etc.

4. 3PLs help expedite new products and get goods to market faster.  Using 3D printers, some 3PLs are printing parts and prototypes for their customers to test.  

With the consumer appetite for fast delivery and immediate order of new products, being able to test market prototypes and get goods to market faster provides a distinct advantage. Whether it is a new product launch, introduction of a “new and improved” product or simply standards orders of goods to fill retailers’ shelves, some 3PLs have mastered ways of simplifying receipt to get goods to the shelf faster.  For example, having a 3PL handle the ticketing and bagging of goods, relocation of goods from bags to hangers and other similar processes can expedite goods to shelves at a lower cost.

6. 3PLs can handle reverse logistics and returns processing.  In dealing with goods that have a high rate of returns such as apparel and electronics, using a 3PL can have distinct advantages and eliminate unnecessary headaches.  Some of the activities associated with returns processing are cost competitive and can include inspection and testing, refurbishment, etc.

10. 3PLs help their clients reduce business risk.  By outsourcing activities to 3PLs, clients are able to reduce risks associated with issues such as compliance, environmental issues, workers compensation, unionization and EEOC.

11. 3PLs act as strategic partners in global logistics.  Selecting a 3PL with specialized expertise and experience in intercontinental freight forwarding can provide considerable cost savings and peace of mind.  Many large multinational corporations are segregating the 3PLs they use by the services they provide as well as by the manner in which they will interact with them.  This enables the centralization of logistics management and expertise and minimization of vendors used.  

3PLs involved in the centralized group of logistics providers are typically considered to be Tier 1 logistics providers are hired to help optimize transportation networks and act as strategic partners. Tier 1 3PLs typically offer a broader range of services including warehouse management and transportation management and use technology to provide supply chain visibility, data analysis and other services.  With their economies of scale and advanced technology, Tier 1 3PLs often have increased visibility into their clients’ supply chains and use this to increase efficiency, reduce costs and optimize inventory.  3PLs that provide specialized services, or work in selective modes or geographically limited areas are considered to be Tier 2 providers.