The ceaseless pressures of adapting to market changes, reducing cost, fostering innovation and enhancing productivity have made outsourcing supply chain an enabler of consumer satisfaction and sales conversion. 3PL companies have underscored their outsourcing strategies, providing warehouse management, ecommerce fulfillment, customization services and freight management. They are banking on supply chain efficiency on the back of attractive pricing, robust growth trajectory and higher yields. Why are so many companies turning to 3PL partners for outsourcing activities?
If you put your money into outsourcing, chances are you may outperform your competitors on revenue and growth. Companies outsource to access state-of-the-art technologies and utilize the vast expertise of running a supply chain business. Predominantly, India’s goal to reach a GDP of $7 trillion by 2030 and become a developed country by 2047 largely hinges on supply chain management.
As the government prioritizes placing India as a global logistics and manufacturing hub, outsourcing could be the engine to steer India’s supply chain efficiency.
Why Should You Outsource Your Supply Chain?
Ecommerce giants such as Amazon vouch for hiring a third party for supply chain efficiency. At a time when several retailers are grappling with last-mile and middle-mile logistics, outsourcing can be the trailblazer to build agility, streamline operations and use their wealth of experience in running operations across industries and geographies. Navigate why outsourcing should remain at the top of the list in your supply chain management.
Demand Forecasting
A sudden spike in demand may catch you off guard. Outsourcing supply chain can be the game changer in assessing changes in demand, market trends and historical data. 3PL companies can use predictive modeling, AI/ML, and advanced analytics for actionable insights and prepare for any changes effectively and proactively.
Cost Reduction
Managing operations in-house can put a toll on your balance sheet. Keeping costs in check becomes easier when an external organization manages your supply chain. Outsourcing is one of the most popular strategies to save considerable costs and help you focus on your core activities. For instance, a 3PL partner can ensure timely order fulfillment and boost capacity with automated picking solutions and inventory management software, keeping the need for your infrastructure expansion at bay.
Improved ESG Performance
You could play your part in India’s concerted efforts to boost the environmental, social and governance profile through outsourcing. 3PL companies can navigate supply chain emissions and identify suppliers who are lagging in containing emissions. They can also foster risk management, diversity, inclusion and a safe workplace.
Technology Access
Supply chain efficiency largely depends on the technology prowess that a third-party logistics partner brings forth, including automation, robotics and software solutions. Savvy outsourcing partners such as WareDepot use their fulfillment centers to employ real-time tracking and demand forecasting to underpin their supply chain management.
Fast Shipping
With outsourcing supply chain, shipping time can be reduced dramatically. If you rely on an in-house shipping service, alas! You may be struggling with packaging and warehousing functions, leading to shipping delays. 3PL companies can come to your rescue with cloud-based inventory management and automation tools. Having a host of warehouse facilities in strategic locations makes outsourcing supply chain worth a bet.
Things to Consider When Outsourcing Supply Chain
Hiring an external organization that is adept at managing fulfillment centers, inventory and warehouse is not a cakewalk. The strategic decision often involves much more than delving into price and quality. The 3PL company you will engage with will play a monumental role in your company’s competitiveness, brand value and efficiency. The following criteria dive into the realm of checklists for you to consider when choosing an outsourcing service provider:
Reliability and Location: Is the 3PL partner reliable? You are expected to peruse their track record, financial stability, regulatory compliance and certification. The proximity of a supplier affects shipping costs and lead time, influencing customer service.
Risk Management: 3PL companies that adopt a proactive approach to combat disruptions may be your outsourcing choice. A contingency plan in hand is a big yes if you are contemplating investing in supply chain management.
Price and Cost Structure: Assess the pricing structure and do not get apprehensive about the initial costs, as the long-term value may be a blessing in disguise. You may have to pay only for the services availed, negating the heavy investments in infrastructure and technology.
Scalability: If you anticipate an uptick in the volume of orders, the 3PL provider should be able to meet your demands. The success of outsourcing supply chain hinges on providers’ response to market changes, including during seasonal peaks.
Technological adoption: 3PL companies that are bolstering their fulfillment centers with advanced technologies such as AI and ML should be on top of your list. This will provide you with a strategic advantage through advanced analytics. You may also consider if they have user-friendly design, real-time visibility and data visualization to enhance supply chain efficiency.
When selecting a third-party logistics provider, choose the one that aligns with your objective and goals. Negotiate contract conditions, define service level agreements (SLAs) and consider if long-term collaboration is the way to go. You should invest in outsourcing companies that can help develop customized solutions and overcome disruptions.
What better than WareDepot, who has won spurs across India with its state-of-the-art
Fulfillment Centers and Warehouses pan-India across six cities-- Mumbai, New Delhi, Bangalore, Pune, Hyderabad and Kolkata? With WareDepot, be rest assured of unparalleled accuracy of fulfillment, same-day order processing and two-day shipping nationwide.
Make your Business Future-ready with WareDepot
Outsourcing supply chains can help you address tomorrow’s challenges and cash in on opportunities to stay cut above the rest in the competitive Indian market. If you are an incumbent player or a startup, outsourcing supply chain can help you open the gates of cost savings, technology, scalability, sustainability and risk management. You should find ways to foster customer experience, warehouse distribution and inventory management through a reliable 3PL partner.
Waredepot has spent years cultivating ideas and supply chain network to move around India cost-effectively and quickly. Our technology-driven approach will keep you ahead of your competitors and help India reach a $7 trillion economy by 2030.
Amidst evolving supply chain complexity, maximize the benefits of outsourcing and minimize the risks with WareDepot.
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