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Online business owners that are fulfilling orders from home or small warehouses can easily become overwhelmed as business grows. When orders start to exceed fulfillment capacity and production exceeds storage space, business owners are forced to find solutions. While growing your business, procedural gaps and inefficiencies will crop up. Promptly identifying solutions to unforeseen hiccups will allow your business to successfully compete and thrive even in the toughest situations.
What to do when your business can't ship orders fast enough?
Take a step back and analyze the efficiency of your current system. What's working? What's not? Thorough assessment and process analysis can pinpoint inefficiencies. Think about all possible solutions and take the time to find a solution that will not only solve immediate business logistics issues, but will take you into your long-term goals as well. One option for entrepreneurs that find their business is expanding out of their control is outsourcing.
Is your business becoming unmanageable? Are logistical concerns consuming time that is better spent on the main focus of the business? If so, now may be the perfect time to start partnering with a 3PL company.
Another option for businesses that are not quite ready to outsource is looking into different inventory management systems. This can help you get a handle on merchandise organization. Efficiency and organization go hand in hand. Simply having a good inventory management system can streamline your business enough to create order out of chaos. For some business owners, this option may be enough to find breathing room with no further investment.
3PL Companies: Are they right for your business?
A 3PL refers to third-party logistics companies. These 3PL's can ease the growing pains of small businesses by taking care of order fulfillment and offering storage solutions among other services. A 3PL can be especially helpful for growing eCommerce companies that require national and international order fulfillment.
Outsourcing operations to a 3PL is a great solution for businesses that are understaffed and outgrowing current infrastructure. These companies will facilitate order fulfillment, freight shipping, and import and export logistics. They can also help to coordinate additional inventory storage space. Services like these are worth their weight in gold.
3PL companies are especially suited to midsize businesses. While large corporations have the resources to invest in the latest technologies and automations like robot pickers, the average business can't afford to bring this level of operations in-house. A 3PL allows you to leverage these resources and adapts to your demand on a needs basis.
This is especially advantageous for businesses that are seasonal by nature or those that experience predictable (and unpredictable) high and low volume cycles. The capacity of your storage and fulfillment labor can easily be scaled accordingly. Keep your business nimble without significant investment in labor or warehouse properties!
How will supply and demand factors influence your decision to outsource?
Entrepreneurs that are comfortably managing customer demand themselves aren't great candidates for 3PL investment. It doesn't make sense at this stage. We typically recommend to think about outsourcing when you're packing and shipping over 20 orders a day, on a regular basis. Once your business takes off to a point that inventory can't keep up with demand, business owners are presented with growth options.
Do you have to limit the quantity of products on offer to customers to meet your bandwidth? Entrepreneurs who choose to outsource business logistics at this point can have the best of both worlds. Products don't need to be scaled back when inventory storage can be scaled with a 3PL. Without logistical concerns staff can focus their intellectual resources on accomplishing the core concepts of the business. Leave supply chain management to the experts!
Business owners who outsource have the flexibility to increase scale without committing to heavy investing and can decrease resources without wasting revenue. Keeping supply and demand balanced is integral to realize your business's maximum profitability. Third party logistics companies take the burden of ensuring that consumers receive orders as quickly as possible. They concentrate their resources on making space for customer inventory and meticulously take care of supply chain needs from start to finish.
Business Logistics to the Rescue
Logistics companies don't just concern themselves with day to day operations. They are the invisible glue that holds economies together. That has never been more evident than with the supply chain disruption that occurred in the early spring of 2020. Ecommerce businesses struggled to meet increased demand and brick and mortar stores folded in droves. The crisis not only proved the importance of intact logistics, but it provided opportunities for growth and innovation. Some savvy businesses were able to harness the unique market demands that emerged. New technologies like drone delivery options were given more consideration.
Necessity breeds innovation. During the pandemic, members of the logistics community stepped up and applied their internet expertise to aid the global community. Using 3PL technology, brick and mortar businesses were given a life line. Restaurants were able to set up custom websites and offer online ordering. This made it possible to keep up with the increased volume of take-out and delivery orders which in turn kept their businesses alive. Logistics companies usually have an impact that is behind the scenes. It's nice to see the human side of analytical businesses taking center stage.
