Logistics and supply chain is one of the most challenging concepts for eCommerce businesses.
Due to the increasing global demand for procurement, manufacturing, logistics, and distribution activities, significant companies focus on supply chain outsourcing to meet consumer demands and triple their revenue by developing new innovative strategies.
More precisely, the supply chain manages inbound and outbound logistics processes from warehousing to distribution, managing suppliers to manufacturers, and working order fulfillment to meeting consumer demands.
Today, supply chain flows are more intertwined than ever before. In a recent study, 90% of eCommerce companies having some level of outsourcing.
The logistics level of outsourcing is higher than manufacturing. Around 55% of companies outsource their supply chain and logistics activities on a volume basis.
The end-to-end visibility, technology, automation, and speed to market are some of the reasons that prioritize supply chain outsourcing in 2021.
How Can Supply Chain Outsourcing Help Triple Your Revenue?
Business leaders rely on third-party logistics providers (3PLs) for supply chain outsourcing and order fulfillment, inventory management, packaging, logistics, and company-owned assets.
However, many business owners never evaluate the effect of returns until something goes wrong with their company.
This is because supply chain outsourcing is essential to maintain high-profit margins for businesses. Reliable third-party logistics companies take over the hassle of managing the supply chain network. They allow you to access new technologies, business networks, supply chain resources, and capabilities.
Outsourcing the supply chain management helps improve overall cost by taking care of the SCM activities, which is the backbone of the organization. So this is the benefit of effective outsourcing.
If the third-party logistics company has the expertise and prior experience in managing other organizations’ supply chains, they can provide a strategic advantage to an organization.
For example, 3PLs provide flexibility to use tools and technologies for managing supply chains. Their resource and expertise are invaluable and helps those who outsource their supply chain and logistics. Outsourcing the supply chain enables companies to focus on developing better products and services for their consumer base.
Meanwhile, their 3PL focuses on processing orders, inventory, returns, logistics and provides all the data reporting, forecasting, and recommendations for an effective supply chain management solution. The impact of focusing on supply chain resources can significantly improve a company’s sales revenue.
7 Supply Chain Outsourcing Strategies to Implement
Maximization of Resources
Profit boosting comes from the efficiency maximization of fleet maintenance and staffing processes, maintaining in-house supply house staff.
Costs saved from outsourcing supply chain and logistics help improve revenue percentage, which means more sales and less time spent on each activity.
Accurate Data Forecasting
The outsourcing supply chain also opens up other benefits, such as more data collected and used to track changes in the supply chain.
Supply chain managers can use this data to make more accurate sales forecasts and find ways to improve their supply chain’s sales revenue without compromising on quality.
Offer Additional Services
Compared to the in-house function, outsourcing your supply chain to a 3PL provider increases delivery speed, which keeps eCommerce businesses competitive without stretching their finances.
Also, keep in mind that a 3PL provider could make your stand out in customer’s eyes by offering extra services like free delivery. This could help to retain your current customers and attracting new ones.
Having an outsourced supply chain function results in replacing in-house operations with automated and transparent processes.
This offers easier workflow management like timely shipments and enhanced efficiency that drive overall business growth and revenue.
With a pre-established network of courier companies, 3PL providers can offer access to international shipping, warehousing in different countries, and quick delivery of shipments. This will further result in enhancing your reach and business expansion.
Help Mitigate Risks
Today most businesses are looking at how much of their supply chain activities can be outsourced. With a third-party logistics company, you achieve better visibility, risk mitigation, security, and control on supply chain activities.
They help you prepare for audits, safety stocks, identify areas of risks, and take proactive measures to mitigate those risks.
Small-sized businesses with plans for rapid growth are most likely to benefit from outsourcing to a 3PL provider.
For successful implementation of a supply chain on that scale, your infrastructure also must expand. And that’s one of the significant expenses that could impact the overall profitability of your business.
Supply Chain executives need to handle numerous tasks during the planning phase, and that’s why they must ask if they want to build that infrastructure or need someone else to provide it.
Considering these 7 strategies will help your eCommerce businesses to adapt to the rhythm of the latest trends of supply chain and logistics.
Moreover, you will also boost your company’s sales.
Choosing the right outsourcing company or a 3PL eCommerce fulfillment provider could help triple your revenue and result in the expansion of services.