When it comes to warehousing, there are many reasons why it might be a good idea to outsource to a third-party specialist. In fact, if you’ve been handling your own warehousing functions for a while, you may have already come to that conclusion. Indeed, there are many good reasons to outsource your warehousing operations.
Of course, there are the “hard” reasons – you simply don’t have the capital to invest in warehousing space and workforce – but there’s much more to it. We’re talking about better operations and happier end-customers. Legal compliance and improved technologies. And, yes, even major cost-saving benefits, depending on your circumstances.
Still not convinced? Here are eight great reasons you should consider outsourcing your warehouse operations:
1. Simplified Workflow
At the top of the list, and perhaps the most important reason to outsource your warehousing operations is simplicity. Simply put (see what we did there?), outsourcing places the burden of coordination on the outsourcer, not you.
In other words, instead of your company being responsible for coordinating operations between various shippers, carriers, transloaders, and other providers, you can outsource this job (all of these jobs) – and, therefore, let someone else handle policies and schedules, regulations, and logistics. All you need to know: Your cargo is successfully making the journey from point A to point B. Your customers are happy. And you didn’t have to do a thing.
2. More Expertise, Better Service
Long story short: Outsourcing your warehousing operations to a warehousing operations specialist puts some of your company’s most important operations into the hands of experts who really know their stuff – and know how to solve any problems that arise. You, and your end customers, are happier.
3. Lower Risk
In the same vein, by outsourcing your warehousing operations, you reduce your risk. The outsourcing company now assumes all the risk of maintaining your people and processes, as well as supplying your workforce during the seasonal peaks and valleys of demand. You no longer have to worry about any of it.
4. Keep up with Technology
Warehousing operations are constantly benefiting from upgraded technologies, which leaves most companies scrambling to keep up. But, when you outsource your warehousing operations, you’re putting them into the hands of the experts – experts whose job it is to understand, adapt and adjust to changing technologies. In other words, when you outsource with a good company, your warehousing operations will keep pace with current technologies.
5. Comply with Current Guidelines
Current law, and especially the Customs Modernization Act (aka the “Mod Act” and formally the “Title VI of the North American Free Trade Agreement Implementation Act”), requires very specific and strict compliance with current standards. For many companies, these updates and changes can incur significant costs and headaches. When you work with an outsourcer, the cost and headache are theirs, while you know you’re always in compliance.
6. Greater Insights/Business Intelligence
Business intelligence can provide important insights into your company, including supply chain consolidation and logistics. Of course, collecting the facts and consolidating them into understandable business intelligence requires a large amount of detailed reporting, which in turn requires a deep understanding of your supply chain and logistics.
It’s not an easy task – that is unless you outsource it to someone whose job it is to understand your supply chain and logistics. A warehouse operations partner worth their cost will work closely with you to track inventory management, supply, fulfillment, and other factors, and will record them with business intelligence tools, so you are better able to understand both the small details and the big picture.
7. More Time for Your Expertise
In your business, there are things only you do best. And that does not include managing a warehouse and all its myriad logistics.
When you outsource your warehousing operations (and other non-core needs), you free up time and resources for actual core operations: the things you do best. In other words, outsourcing allows you to eliminate distractions, focus your time, and hone your budget and other resources on the things you do best. It enables you to increase the quality of your services.
8. Reduced Overhead Costs
We saved this one for last because, for many companies, this is the reason that makes the decision: Not only does outsourcing your warehouse operations yield all of the above benefits, but it can also save your company some serious dough. By sharing third-party facilities and an outsourced workforce, you can not only see instant savings to your bottom line but also move warehousing operations from a fixed cost to a variable expense, depending on the current market.
If you’re on the fence between maintaining your own warehouse and handling operations in-house vs. outsourcing your warehouse operations to a third party, we hope this has helped evaluate which is right for you.
And, if your decision still isn’t clear, we urge you to continue your research. Contact third-party warehouse outsourcers. Run the numbers. Compare in-house vs. outsourcing costs and logistics, and balance them with non-tangible considerations, like the burden of legal compliance and current technologies.