No matter how good a product may be, missed and delayed shipments will turn the experience of end-users upside down, leaving service providers in the bad books of the customers. 21st-century buyers have hundreds of other websites at their fingertips and they hardly try a service for the second time if their first experience with a business is bad. Supply chain management is as important as the quality of products or services. Disruptions in the supply chain, whether caused by fires, political upheavals, or storms, can negatively affect the supply chain management process, putting the reputation of a business in jeopardy.
According to a study, 41.5% of organizations with supply chain disruptions received consumer complaints, and 36.1% lost revenue due to such disruptions. Working with third-party logistics (3PL) companies is widely being adopted as an effective strategy to reduce supply chain risk.
Being one of the leading fulfillment companies, Red Stag offers a detailed guide on 3PL services to help you find out more about their benefits.
Use of 3PL Services for Risk Mitigation
Small businesses are always looking for ways to grow and improve their operations. Using 3PL services is the best way for such businesses to minimize supply chain risks. The ultimate goal of 3PL is to develop solutions that improve their performance. However, the supply chain is fraught with risks, making it difficult to improve performance. 3PL service providers bank on their experience in the logistics field to reduce some of the risks for such businesses.
Advanced Supply Chain Visibility Solutions For Small Businesses
Advanced real-time supply chain visibility requires advanced technical solutions. 3PLs are useful in this situation. Businesses can understand supply chain risks and gain real-time insights across the entire supply chain with the advanced approaches employed by 3PLs service providers. 3PL uses the advanced technologies of digital control towers and predictive analytics platforms that help small businesses increase the visibility of the supply chain.
Quick Tip: Make sure you have access to clean and accurate data when using data-driven systems such as digital control towers and predictive analytics platforms. As a result, you will be able to make better decisions based on data.
Also read: 11-What are 3PL, 4PL, and 5PL?
Quick Detection of Supply Chain Threats
The 3PL service providers use risk management tools, including big data analytics and machine learning to help you see where potential supply chain threats are and how to reduce disruptions. If financing in proprietary risk management technology is too expensive for your company, you can use 3PL.
Risk management solutions are provided through 3PLs, which map and visualize supply chain processes, detect risk hotspots, and suggest appropriate mitigation for immediate recovery. These risk management systems can also detect various hazards worldwide, such as production interruptions, and alert immediate senders to those who have their supply.
Data-Driven Stock Management Practices
Lack of information can lead to overstock and out-of-stock issues, damaging the company’s bottom line. For most businesses, overstock, out-of-stock, and avoidable returns account for 11.7% of lost revenue. On the other hand, shippers can better manage their inventories and reduce barriers by cooperating with 3PL service providers.
3PLs provide inventory tracking tools that enable shippers to view the status of their inventory, track changes over time, and develop emergency plans in the event of a shortage. In addition, since it can be difficult to predict consumer demand for items, 3PLs use predictive analytics tools to estimate stock management in inventory and accurately track the influx of orders. As a result, shippers will be able to reduce excess inventory and operate more efficiently during peak seasons.
It is important to reduce supply chain risk so that your supply chain continues to operate and your customers can get their orders timely. Therefore, your company must partner with a third-party logistics supplier to minimize supply chain risk. They help reduce supply chain risks by handling all logistics processes and enabling a more efficient supply chain.
Also read: Top Considerations to Put in Mind When Hiring a Managed IT Service Provider
