As your company grows and your supply chain becomes more complex, it can quickly outstrip your in-house capacity to manage it. You might have outsourced a few links in the chain along the way, but it’s worth your while to step back and evaluate whether it makes better business sense to outsource more, or even all, of your supply chain to the right third-party logistics (3PL) provider.
Doing so comes at an investment, but it’s one that can provide a serious return that could open incredible opportunities for further growth. Here’s how supply chains with third-party logistics create long term profits for your business.
Keeping Your Focus on Your Core Business
If you aren’t a 3PL service provider, then it goes without saying that you didn’t go into business for logistics. You went into business because you have a product you want people to buy. This means what’s at the core of your company is product development and marketing. Logistics are a necessary aspect of storing and moving materials and products around to where they need to go, but it’s not your core business.
In the early days of a company, handling the logistics of the supply chain may be easy enough to do in-house. As your company grows, however, managing the supply chain becomes fraught with hassles and headaches. An inefficient, suboptimal supply chain can end up holding your company back from growing.
At that point in growth, it makes sense to outsource most or all your supply chain operations to the experts who know how to do it right so you can focus on product development, marketing, and sales to keep your business growing.
An Integrated Solution with the Right 3PL Service Provider
A common scenario we’ve seen with growing companies is a fractured, inefficient supply chain. As the company grows, some links in the supply chain continue to be managed in-house while others may be outsourced. In some cases, different links in the chain may be outsourced to different 3PL service providers who specialize in that specific link. As this process continues, multiple service providers will inevitably become a drawback. Each switch-point in the chain to a different vendor becomes a potential bottleneck, delay, or an opportunity for mistakes to occur.
We call this “supply chain creep,” and it can prevent your company from achieving an optimal supply chain. The best option of all is when a single 3PL service provider can meet most or all your supply chain logistical needs. An integrated solution with a single provider is one that has the potential to be seamless, resulting in greater efficiencies and fewer chances for problems to occur.
Economies of Scale and Lower Capital Investments
A key metric/KPI related to this is capital costs related to supply chain.
The right third-party logistics provider gives you the opportunity to take full advantage of powerful economies of scale that would require huge capital investments for you to build and maintain in-house. Instead of renting, staffing, or building and maintaining warehouses where you need them, your 3PL partner has already made those investments on your behalf and can make them available to you at a much cheaper price than your company would pay on its own to create or lease such facilities.
This same approach applies to multiple links in your supply chain and can apply to inventory management, distribution, order fulfillment (both traditional and e-commerce), shipping and freight coordination, and even final mile logistics with the right provider. The money you save in capital expenses and the economies of scale your 3PL provider offers can instead be channeled to the product development, marketing, and sales efforts that fuel your company’s growth and drive long term profitability.
Managing and Optimizing a Supply Chain: Expertise and Technology
A key metric/KPI here is your company’s shipping costs.
Part of the economies of scale the right 3PL provider offers that deserves to be highlighted is personnel, expertise, and technology. As your company and its supply chain grows, you could easily devote an entire staff position just to the seemingly insignificant task of figuring out the most cost-effective and efficient carrier for shipping materials and goods where they need to go. Developing that expertise, not to mention having the right tools and technology to do it quickly on a case-by-case basis is no small feat. Those shipping costs add up quickly to mind-boggling figures if not managed properly.
Again, it comes down to determining if it’s worth the time and resources to develop such expertise in-house or if it makes much more sense to outsource it. The right 3PL partner has spent the time and resources to do it and can make it available to you for a fraction of the cost it would take for you to develop the capacity to handle it in-house.
You can see the pattern that’s developing here. It’s about putting your dollars to work to achieve superior logistical results without having to reinvent the proverbial wheel yourself.
An Optimal Supply Chain is a Competitive Advantage
A key metric/KPI to keep in mind here is time-to-consumer.
Businesses that limp along with a subpar supply chain have failed to realize the value and benefit of an optimized supply chain. A strong supply chain is without a doubt a powerful competitive advantage that drives growth and profitability.
When materials get to where they need to go on time, manufacturing proceeds as it should. When finished products get to where they need to go on time, the result is happy customers who become loyal fans. Repeat business is made possible with a seamless, optimized supply chain. Loyal fans become an integral part of marketing efforts as they spread the word through reviews, recommendations, and referrals.
Once again, the point is to demonstrate how a 3PL partner can deliver growth-boosting efficiency by streamlining and strengthening every link in your supply chain for optimal productivity and profitability.
Ranger 3PL: Superior Supply Chain Logistics in the Midwest
With our ideal location in Seymour, Indiana, Ranger 3PL offers easy access to the following key midwestern population centers within easy drive-times as noted:
- Indianapolis IN: 1 hour
- Louisville KY: 1 hour
- Cincinnati OH: 2 hours
- Springfield IL: 4 hours
- Chicago IL: 4 hours
- St. Louis MO: 5 hours
Ranger 3PL also offers a wide range of logistics support and expertise, including the following warehousing, inventory, distribution, and fulfillment solutions for materials and products:
- Warehouses: Warehouse facilities number 16 with total capacity in excess of 700,000 square feet. Find out more about our Warehouse Facilities.
- Food Grade Storage: Precision control of our warehouse temperatures meets all regulatory requirements for maintaining food safety and is available in many of our warehouses.
- Customized Order Fulfillment (B2B & B2C): Let Ranger 3PL customize order fulfillment to meet all the needs and requirements of your business.
- Materials Management: We can easily store critical materials and ship them on an as-needed basis to your manufacturing facilities.
- Inventory Management: State-of-the-art inventory tracking technologies mean you always have a view of what you have and when it needs to be replenished.
- e-Commerce Distribution/Fulfillment: WE can configure your online ordering system to automatically copy orders with particular zip codes to us for final-mile logistics and delivery anywhere within our geographic service area.
- Quality Control: All our facilities are maintained to the highest standards.
- Pallets: Proper storage of materials and products requires the right pallets, and Ranger 3PL builds pallets in a variety of designs and to the specifications your business needs.
At Ranger 3PL we pride ourselves on being the kind of logistics partner you can trust and grow with as your company expands. We help you overhaul, streamline, and optimize your supply chain into a powerful competitive advantage that will drive your company’s growth and generate more long-term profits.
When you have the opportunity to focus on critical aspects of your business such as product development, marketing, and sales rather than trying to handle supply chain logistics in-house, a virtuous cycle of growth leading to more growth is created.
We look forward to discussing your needs and how Ranger 3PL can customize the supply chain solutions that will drive growth and profitability for years to come at your company. Use the contact page of our website to get in touch or call us directly at 812-522-6000.