Mitigating Risk Through 3PL Sourcing

While it’s safe to say that eliminating risks all together simply isn’t feasible, that doesn’t mean you can’t take steps to minimize risk. And now is the time. According to the New York Times, the chaos at ports, warehouses and retailers will probably persist through the year, and perhaps even longer. Much of this chaos is beyond the control of a single shipper or receiver, but there are ways to manage risks by partnering with a 3PL. Is this a self-serving observation? Perhaps, but your 3PL offers collaboration, flexibility, and visibility that shippers rarely have on their own, so we think it’s good advice.

Outsourcing Your Warehousing

Leveraging the services and space of your 3PL’s warehouses places your inventory of finished goods or raw materials in the hands of a professional whose business is safeguarding client products. In the argument of ‘build vs. outsource’, having to respond quickly with resilience clearly tips the scale toward outsourcing. Consider you will:

• Reduce the risk of shrinkage and unaccounted damage and any potential implications with your insurance policy.
• Scale easily due to increased flexibility, expertise, and responsiveness of your 3PL.
• Ship faster and with greater accuracy through well-staffed warehousing.
• Take advantage of additional services such as packaging materials, inventory management, reverse logistics and kitting.
• Ease disruption caused by season peaks, promotions, or other high demand periods.
• Tap into 3PL WMS for more accurate inventory data.

Leverage Your 3PL’s Transportation Network

Another very important advantage of third-party logistics companies is they have a vast carrier network. This, when put to good use, can help execute every step in the supply chain in the most efficient way. Major 3PLs, such as Wavepoint, have a wide network of interconnected routes that permit them to maximize efficiency while shipping their clients’ freight. They put this network to good use and have a firm understanding of alternative routes and solutions when unexpected challenges occur.

• Get out from under regulatory compliance, driver shortage and training, and capacity constraints of your own trucks.
• Reduce your rejection rates; track your designated carrier’s routing guide compliance and time to acceptance.

• Get ALL the benefits of your partners transportation management system by understanding the data points and making improvements where needed.
• Reward your best carriers with more freight – they deserve it.
• Treat your 3PL and carriers like partners, working through issues, acknowledging outstanding performance.

Use All the Technology Available

Chances are, your 3PL has invested heavily in supply chain technology, make sure you use it. And not just for daily tasks, but for developing a more resilient and responsive supply chain. Solutions provided by 3PL partners with their access to technology, reach, and logistics experience can help you develop efficiency and reduce risk during turbulent times. According to a recent Gartner survey, the three key focal points for mitigating disruption in the supply chain are visibility, resilience, and agility which can be managed by 3PLs. Do you have:

• Control tower visibility over all supply chain activities in real time?
• Lane analysis to reduce the number of stops in your transportation. Don’t let freight sit.
• Design alternative routes to pull from redundant manufacturing, whenever possible.
• Reduce the complexity of your supply chain, so that manage by exception is more feasible.
• Perform geographic analysis to determine geographic regions exposed to natural hazards or security risks.

Risk management is not a ‘one and done’ but does have the potential to put you in a better spot ‘the next time.’ Ask a supply chain professional at Wavepoint how you move toward risk management.