There are a number of reasons companies use a 3PL ranging from lack of owned space to location requirements. Those reasons are very reasons to a third party to handle your warehousing and distribution but there are many others as well.
One of the “other reasons” is cost saving. That seems to be contradictory since you have to pay for 3PL service. If done with the right partner, a 3PL can actually save you money. If a 3PL practices Lean Warehousing principles, you know their costs are already lower than those that don’t. Lean in warehouses is similiar to lean in manufacturing–ROOT OUT WASTE wherever it is found. Waste costs lots of money no matter what it is.
Part of a Lean focus is continual improvement and a process orientation. Don’t be afraid to ask a potential partner what has changed recently in their processes to improve them. Active Lean practicioners know that many small, incremetnal changes are more effective , more easily implemented and easier to accept than huge changes. One of our mottos is “If you really want to do something, you will find a way. If you don’t, you will find an excuse.” Don’t partner with a warehouse that uses excuses.
At SSMG Warehousing we have weekly meetings with all of our associates to let them suggest changes and make observations on current practice. Recently they suggested a change to our whole location system. I have to admit I was skeptical but their suggestions were absolutely correct. They have been implementing them gradually throughout the facility and all the results are positive. Cycle counts are easier to complete and accuracy is through the roof. Continual improvement and change is our constant state. You should expect no less from a warehouse partner.
The next post will reveal more reasons why a 3PL partnership makes sense.
