When you own and manage your own warehouse there is limited flexibility when it comes to reducing costs. The most significant reduction is most likely to be in your workforce, which can involve making the decision to lose hard-working and often essential staff. Otherwise, there are outgoings and costs associated with the building and infrastructure, but turning lights off and heating down does not motivate staff and may not bring the results you need. It’s important to react to slowdowns in your business but with fixed overheads, there is often nowhere to go.
- Flexibility comes to those that outsource to a third party warehouse. Now you don’t have to pay for empty shelf space as you reduce your seasonal stock levels.
- You do not have to pay staff to wait for orders or deliveries, or try to accurately predict the most efficient and cost-effective staffing levels.
- Being flexible means you won’t have to train new staff members.
- Flexibility means that costs are clearly related to your anticipated and actual performance and not your projected forecast that can change depending on your customers’ requirements and the economic marketplace.
- Having flexibility means no longer paying for the ups and down of your inventory due to the seasonality of your products. If your business needs more capacity for any of the supply chain functions, it is easy to scale up and down.
- By taking a flexible approach, there is no pressure to invest in expensive IT systems as reputable 3PL providers will continually invest in this area.
- Being flexible allows you to lower your operational costs which reflect on your bottom line. This helps you retain your customers.
Be flexible while your 3PL provider continuously improves their processes. Let them keep looking for ways to reduce their costs while continuing to provide you with service and quality.
