Companies with specialized requirements, such as pharmaceuticals manufacturers, have traditionally been hesitant to outsource distribution. But as technology improves, many third-party logistics providers (3PLs) are better suited to serve companies with specialized logistics requirements.
The only constant in life – and in the logistics industry – is change. Maybe you’ve released a new product, or are discontinuing a current one. Maybe you’re merging with another company. Regardless of your unique situation, changes in the ecommerce industry and your business can alter your capacity and impact your logistics.
Since we’re located in the heart of Indiana, I admit that we’re a little biased when we talk about the logistics industry in the Midwest. But when you take a critical look at the industry, such as in this infographic, distributing from the Midwest is a good business decision for many retailers.
Most companies start out managing their own logistics, but when should you start thinking about outsourcing responsibilities such as warehouse management, fulfillment or distribution?
There are dozens of reasons that a delivery route may need to change: a new retail outlet just off the standard route, a new distribution center in a different location, an influx of new drivers. Logistics is about making the most of the time you have, and being as efficient as possible. For delivery routes, a key component of efficiency is understanding the delivery route thoroughly, and doing plenty of research before you send your driver on the first trip.
Capacity and building size play a large role in logistics, and it’s vital to know when your building has actually reached capacity. Once it has, you have two options: hold steady and stop growth, or add on to your building or move to a new one that allows you more space. There are a few tell-tale signs that it’s due time for you to consider a new, larger building.
Amazon already towers over all other providers when it comes to the B2C side of distribution, but now it’s making further strides to monopolize and become the world’s largest 3PL for B2B. Should you, as a business owner, be leery of that kind of relationship and involvement? How do you know if working with Amazon for order fulfillment is the right choice for you, or if their growth limits your specific needs?
With any type of logistics planning you come across in your business—whether working completely through a 3PL or beginning to take on responsibilities for yourself—you’ll face questions like this one about how to divvy up who will be accountable for what. But weighing such an idea as owning and operating your own truck fleet can be one of the most important decisions you make.