As more and more businesses become overwhelmed with managing vital supply chain functions with company resources, the adoption of third party logistics is gaining ground. But the decision to outsource logistics functions, such as procurement, distribution and transportation, instead of operating them in-house can be a tough call and requires careful consideration.
If you're torn between the two options, it's important to gain insights into when enlisting the services of a third party logistics (TPL) provider is needed.
Here are a few circumstances when seeking the services of a TPL provider would be beneficial to your business.
When logistics management isn't your business's core competency
For you to deliver value to your customers and gain a competitive edge over your rivals, you'll need to stay focused on what your business is good at doing. If you operate a large chain of retail stores, for example, a TPL provider can relieve you of the job of operating several fulfillment centres, thus allowing you to focus on increasing your customer base, sales and profitability.
If managing logistics functions isn't one of your business's strong points, it would be best to leave the job to a TPL service. This way, you'll have more time to improve the core competencies of your business knowing a competent entity is handling your logistics requirements.
When the initial costs of implementing an in-house operation is too expensive
Meeting the logistics requirements of your business may require the use of vehicles and critical equipment that cost lots of money to buy. If you're not in the logistics management business, incurring these upfront costs might not make good financial sense for your business.
Using a third party logistics company is a cost-efficient way to meet your logistics requirements, as it eliminates the need to spend huge amounts of company finances on implementing an in-house operation.
When achieving increased flexibility is vital for your business operations
Do you desire greater flexibility in your business?
You can free up more time to spend on meeting tight deadlines and fulfilling large customer orders by outsourcing logistics management to a third party company. There's no need to pass on new orders because you're bogged down with in-house logistics management.
If you're still unsure about whether or not your business can benefit from the services of a third party logistics provider, don't hesitate to discuss your requirements and needs with the professionals at a local 3rd party logistics management company.