They’re recognizing that a multi-node network can help to control costs and improve service to customers.
Establishing a strategic distribution network can be easier said than done, however. Saddle Creek's new whitepaper explores a few of barriers to implementation – and the role a 3PL can play in addressing them.
Following is an excerpt from the 2018 Distribution Network Trends Report…
While the ROI for network reconfiguration can be significant, distribution model changes can be challenging and costly to implement for a number of reasons.
To overcome barriers like these, many companies turn to third-party providers.
Experience and understanding of best practices allow 3PLs to offer strategic counsel and recommend the best network configuration to meet current and future needs.
Often, companies take advantage of a shared-space warehousing environment in which a third-party provider manages multiple-client operations in a single facility with room for expansion.
Patterson explains:
“Shared space gives companies a creative way to enhance operations while increasing flexibility and controlling costs. It allows them to accommodate the ebb and flow of their business and adapt more quickly to changes in the marketplace. Not only do clients avoid the fixed cost of leasing more space than they need on an on-going basis – they also save on operating, personnel and other management by sharing those costs with others.”
With a distribution network already established and staff in place, a third-party provider offers the ability to select DC locations that are closer to your customers, reducing transit times and controlling shipping costs without adding to your overhead expenses. If you prefer, a 3PL usually can open a new DC to meet your specific needs.
A third-party provider will invest in the latest technology, so you don’t have to – from advanced solutions such as OMS, WMS and TMS to automated fulfillment and material handling solutions.
In addition, an experienced 3PLs third-party provider will pay careful attention to solution design and utilize proven processes to keep your logistics operations running smoothly.
Related: 3 Ways a Third-Party Logistics Provider Can Support a Multi-Site Distribution Model
Related White Paper
2018 Distribution Network Trends Report
With the right DC network configuration, companies can improve service levels, better manage inventory and reduce transportation costs. Download Now!