3PL – Not Just Shipping Product, Enabling Growth!

Boxing up merchandise

Does it feel like your business could be growing faster?  Have you spent too much time seeing competitors grow more quickly than you, even though you know your products, service and strategy are good?  If your answer to these questions is yes, it could be that your growth is being hindered by your 3PL, instead of being invigorated and supported by it.  The focus of this article is how the right 3PL can be a strong partner in your long-term success, not just a vendor that ships your products.

More Than Product Shipping

A good 3PL does much more than store and ship products.  At Enlinx, we strive to be a long-term, strategic partner that helps our clients:

  1. Create an order fulfillment strategy that supports their growth initiatives
  2. Manage their inventory to strengthen sales and minimize cost
  3. Minimize opportunity cost
  4. Maximize sales opportunities through scalability and flexibility
  5. Effectively manage supply chain, particularly from suppliers to customers

Strategy – If you engage with your 3PL as an extension of your in-house team, they can lend their expertise and experience to your business strategy.  Keep in mind, 3PL’s like Enlinx typically have dozens of clients and as a result have a lot of insight into how different businesses and leadership teams are successful.  This insight can lead to ideas that help your business grow quickly and provide options about how to effectively manage the challenges that come with rapid growth.

Inventory Management – Every business should be concerned about inventory management, as inventory is often one of the largest expenses.  Efficient management of SKU count, inbound volume, inventory turns, and accurate inventory counts are all critical to intelligent growth for both 3PL’s and their clients.  Sophisticated 3PL’s will have significant investments in technology, equipment, facilities and people that help manage inventory and keep costs down.

At Enlinx we place a lot of emphasis on inventory management and work closely with our clients to: 

  1. Monitor product aging to provide insight and data driven decision-making opportunities
  2. Intelligently add and remove SKUs as their businesses evolve and grow
  3. Identify slow moving product and create a donation or disposal strategy for it

All of this helps clients reduce inventory waste and the associated expense, which can be very costly.

Opportunity Cost – An important aspect of inventory management, and a benefit of working with a good 3PL, is minimizing opportunity cost.  Ask yourself how costly it is to:

  1. Run out of product and not be able to fill orders
  2. Ship incorrect orders to consumer and retail customers
  3. Delay or avoid growth initiatives for fear that your 3PL can’t support them
  4. Suffer mistakes because of bad processes and ineffective technology
  5. Spend your time correcting 3PL mistakes instead of growing your business

“Stepping up” to partner with a more sophisticated 3PL can be a crucial step toward accelerating business growth, while minimizing the mistakes, frustrations and resulting opportunity cost listed above.  

The potential short-term pain of making this type of change can set a foundation for long-term success.  Many companies, particularly small to mid-size experiencing steady growth, can recognize phenomenal results.  It is not uncommon for these types of companies to grow 2 – 3X  or more, in a relatively short time period after partnering with the right 3PL for their business.  The question of “right 3PL” can be a complicated one to work through.  You can learn more about it here.

Scalability and Flexibility

Pursuing aggressive growth doesn’t make much sense (and is probably risky) unless your operations infrastructure can support it.  Aggressive growth requires a scalable and flexible environment that includes:

  • A savvy team with seasoned experts 
  • Modern technology and equipment
  • Effective processes and a commitment to continually improving them
  • A thoughtfully designed and well-engineered facility that can accommodate growth

For a business to create this on their own requires a significant investment, along with the capital to manufacture more product, hire more people and support customers as growth occurs.

Alternatively, a 3PL like Enlinx that has this infrastructure in place can quickly and effectively pivot to meet clients’ needs.  As you consider your growth initiatives and how best to support them, it’s probably worth exploring 3PL options.  If you do, make sure you understand their ability to scale and flex to meet your requirements both short and long-term.

Supply Chain Management – 3PLs play a critical role in the supply chain, which you can learn more about reading, “What Role Does Warehousing Play in Supply Chain.”  Just as important as their specific role, is the familiarity 3PLs have with the complete supply chain.   This familiarity comes from the services and support they provide clients in the normal course of business.  This insight is another element of the 3PL value proposition. A couple examples of this value can be found in working with suppliers and freight carriers.

Helping clients work with their suppliers to reduce inbound freight costs, educating them on how to prepare product for inbound routing compliance and passing back fees and fines to suppliers for mistakes they’ve made are just a few examples of how Enlinx helps its clients.  In addition to helping out with suppliers, 3PLs often have deep relationships with various freight carriers and can help clients cost-effectively navigate the confusing world of freight and transportation to reduce cost and tailor a freight plan that works for them. Freight management is another area where Enlinx excels in helping its clients.

Summary

If you think your growth is being hindered by not using a 3PL, or not working with the right 3PL, it may be time to consider a change. A little leg work now will pay big dividends down the road!  If you think Enlinx can help you conduct this analysis please contact us.

Get in touch to see what we can do for you.

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fulfillment@whiplash.com

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