Running a successful business is hard. It requires endless lists to be taken care of, finding, hiring, and maintaining experienced employees with specialized skills sets, and an understanding of workflow to put it all together. Some businesses spend years and wasted capital finding their groove and others sadly never find it. However, smart businesses look outside their company for professional partners to help them increase efficiencies in their business.
One way companies increase efficiencies is by using a Third-Party Logistics (3PL) company that uses Lean Production Principles. A qualified 3PL will likely already use several elements of lean production to reduce unnecessary touch points and wasteful processes. These elements will lead your company to greater efficiency and a boost to your bottom line. Here are a few ways your 3PL incorporates lean production to improve your business.
Decreased Capital Investments
One of the primary principles of lean logistics is doing more with less. When your company partners with a 3PL; you remove the need for warehouse space. This markedly cuts down on facility costs like rent, insurance, and maintenance. It also reduces warehousing and transportation needs which, in turn, lowers the amount of capital investment you need to maintain the business.
3PL Inventory Management
Inventory is the bane of many a company’s existence. Inventory management is essential to every business, and as more inventory requirements are popping up (for example, tracking in Cold Pharma), more companies are partnering with 3PLs to handle their fulfillment. The 3PL monitors current inventory and works with suppliers to maintain shipment schedules to ensure production lines flow consistently.
An excess of inventory leads to waste and profit shrinkage, whereas too little results in wait time that affects customer service and profitability. When you outsource to a 3PL, they expertly manage your inventory with the latest technology and industry best practices. They also track and analyze all data, so they can anticipate slow periods and prepare for busy periods guaranteeing inventory is always of the highest quality and in stock.
With fulfillment out of the way, businesses are free to focus on client-centric practices like customer service, building brand loyalty, and bringing new products to market. Lean logistics empowers you to use all of that “found time” from outsourcing on the big picture items that need your attention. This level of efficiency, flexibility, and resource management will grow your business and give you an edge over your competitors.
Partnering with a 3PL who employs lean logistics is a great way to increase efficiencies, profits, and time capital. Be sure to work with a 3PL that uses lean logistics principles and industry best practices. We at JIT are one of those 3PLs and would love to hear from you!