Interested in cutting costs and effort on your warehousing solution? Outsourcing warehousing services has never been easier on your personnel or your budget. Warehouse management is a big challenge for retailers and B2B sellers. The money they spend on warehousing and merchandise management is staggering. That’s because warehousing is becoming more complex. The cost of warehousing has increased due to a growing variety of business needs.
Outsourcing allows companies to improve the costs of warehousing and other logistical factors. They can reduce the impact returns have on their budget. They can also free up time and responsibilities so they can focus on their core business.
Read on to learn more.
What Is Warehousing Services Outsourcing?
Warehousing is a supply chain process companies manage as part of logistics. Warehouse needs differ from company to company. Retailers may find their needs increase during peak selling periods.
With warehousing, all companies have one thing in common. The cost and responsibility of warehouse management is a business of its own. It’s time-consuming and costly, and not part of their core business.
Warehousing services relieve these concerns. Companies dedicated to warehousing can specialize in capabilities unachievable to companies internally.
They can find efficiencies in their operations that outweigh the cost of investment. And they can provide better service and capabilities to customers.
What Are the Key Benefits of Outsourcing?
Customer and business demands are always evolving and diversifying. Companies are adopting more flexible solutions across their enterprises to meet those demands.
Outsourced warehousing provides its own specific benefits to meet customer demands. The following eight benefits show how you can improve operations with outsourcing.
1. Packaging and Processing
Inventory management is only one function of modern warehousing. Two added benefits are packing and processing.
In returns and distribution, these two processes can add to internal warehousing costs. You’re also responsible for all liability and quality issues.
Outsourced services provide shared spaces. The third-party handles these services as part of its business model. Its commitment to all its customers assures the quality of these services.
2. Real-Time Inventory Visibility
A third-party warehousing resource will provide inventory visibility that improves asset use. It will also lead to longer asset life cycles, reducing costs.
Stakeholders once relied on monthly or yearly reporting for this purpose. Real-time visibility reduces blind spots in the supply chain.
Real-time visibility shows you negative trends before they lead to inefficiencies or shortages. You can take immediate action that improves operations and limit costly mistakes.
Third parties provide this capability with next-generation technologies. These include location-based intelligence and Internet of Things (IoT). They can invest in sophisticated solutions as part of their business model.
3. Replenishment Monitoring
Retailers lose money when their stock isn’t available to meet high demand. Third-party warehousing offers replenishment solutions that prevent this from happening.
This applies to order fulfillment and returns management. These are two functions that most affect customers.
At the core of every business model is customer satisfaction. Third-party warehouse solutions will optimize processes to meet this end.
4. Efficiency, Labor Productivity, and Cost Savings
Labor costs alone can account for a majority of your warehousing operating costs. You enjoy cost savings when your outsourced solution is a shared resource.
Again, optimizing these solutions is part of third-party business models. You don’t have to internalize these unwanted costs.
Additionally, these expenses should not immediately affect your pricing model. You count on your third-party solution to provide for all its customers, including you.
5. Scalability and Flexibility
You may find you need to increase your warehouse capacity in the future. You might need to expand on fulfillment and returns management as well.
This is a difficult process when managing warehousing yourself. But third-party warehousing services have greater capacity and better services. It’s in their financial interest to do so.
Your services provider may already have scalability solutions in mind. The company should also have an understanding of your flexibility needs.
That means you can expand on your lease based on business growth. You can expand capacity and flexibility based on seasonal fluctuations as well.
What’s more, you can use your extra space for initiatives aligned with your business goals.
At some point, your warehousing needs will change. You may need to add services and capabilities. Think about what it would take to manage these changes internally.
6. Management Delegation
There are countless details to managing warehousing and the broader supply chain.
Here are a few important considerations:
- Compliance issues
- Internal resources allocation
- Hiring and employee safety
- Maintenance and upgrades
- Responding to market changes
- Adapting for changes to business needs
You’re not in business to manage a warehouse. Third-party warehousing services enable you to focus on your core business.
7. Optimized Distribution
Warehousing services are not restricted to the warehouse. Most third-party services include distribution solutions as well.
Your internal distribution model may have factors working against you. Geography, capacity, and equipment can prevent you from meeting customer demands. They can prevent you from increasing business value as well.
Third-party distribution improves workflow and productivity. They optimize their performance to meet the needs of all their clients.
Most third parties will manage warehouse space close to key transportation channels. Keeping road miles down reduces costs. It also reduces the least time-efficient part of the distribution process.
Capability and geography are two considerations when selecting a warehousing and distribution solution. You can expect to find a solution to meet both needs.
8. Advanced Capabilities
Warehousing services will have capabilities you might not have considered yourself. Many of these services could help your business as well.
One popular capability is spot stocking. This allows businesses to use several third-party warehouses near target markets. Spot stocking reduces transportation costs and time-to-market.
Refrigeration is another benefit offered by many third parties. Whether you have existing refrigeration needs, it’s a good capability to have on hand. Also, it’s less costly to manage through third parties.
Some warehousing services can manage hazardous materials. This may not apply to most businesses. But for others, it’s a capability best managed by outside experts.
Let’s Get Started
Need It Now delivers your assets across the street or around the world. Get a quote today to find the best solution near you.