Practical Advantages of Outsourcing Warehouse to a Third Party
There are several reasons why a business may choose to outsource a third party to manage its warehousing needs. Warehousing is a strategic component of every modern business. Your first undertaking can be a bit challenging, but if you are looking for warehousing services in Mumbai, then you are on the right track. The reason why warehousing plays an important role in your business is that it affects your business directly. The right location equals additional profits while a poor location can spell doom to your entire supply chain. Here are a few reasons why you may consider outsourcing a warehouse.
Location is fundamental to any warehouse and a distribution chain. If you want to outsource warehousing services in Mumbai, then it means you can transfer some of your overheads to a third party. For instance, you can lower your expenses on logistics and increase your lead time. A suitable location also means you have easy access to your customers, thereby reducing shipping costs. An excellent location should be near major airports and access to highways for easy transportation of goods. Choosing a centralized location and near your suppliers, vendors, production facilities and distributors also means that you can save a lot on transportation charges.
Easy to Expand
Outsourcing your warehousing needs to a third party gives you the flexibility to expand in the future. You can either scale up or down depending on how your business is doing. This can be due to some factors such as seasons and fluctuations in supply and demand over the years. Going for a third party for your warehousing needs gives you the freedom to expand or downgrade without compromising on quality and customer service.
Take Advantage of their Experience
You can benefit a lot by utilizing a third party’s years of experience in supply chain management. Go for a provider that is known and has been in the business for many years. It would be best if you also choose a third party whose business culture is similar to yours. You will be able to get more hours than you can devote to your business while at the same time improve crucial performance indicators such as on-time delivery, inventory control and accuracy, among other factors.
Get Additional Value-add Services
Besides helping you to manage your warehouse and distribution channels, a third party may also provide essential value-add services. Some of these services include packaging, inspections, assembly, and cross-docking, among other vital functions. You get all the above services at no additional cost, yet they are essential in enhancing your supply chain efforts. Otherwise, if these services are to be part of your core business, then you could see an increase in labor costs, transportation and inventory.
Improve Customer Service Delivery
Outsourcing warehousing services means reduced lead time and an improvement in on-time delivery. This goes a long way in enhance customer satisfaction which makes the customer more loyal to your brand. Your third party can focus on delivery to customers and fulfillment while you focus your efforts on more important matters. Your customers will be grateful, and so will your investors.
Save on Resources
Time and money are your most important resources. You can save a lot of money by using a third party instead of doing it on your own. Use your money to take your business to the next level and leave your warehousing needs to professionals. Your outsourcing efforts will be rewarded by a decrease in capital, labor, and transportation costs.
Get More Time to Focus on Core Factors of Your Business
If you are in the retail, import and export business, you might require a storage facility, but that doesn’t mean you are in the warehousing business. Hiring a third party to be in charge of non-core business operations is strategic since such operations are not direct income earners. Overhead activities such as warehousing could be soaking up your time and that of management which could be diverted to direct business and revenue earners.
Reduce Legal Obligation from Warehousing Health and Safety Compliance
It is hard to run or manage a warehouse to strict health and safety compliance requirements. For instance, it is a legal requirement to train your warehousing staff in most warehouse operations. Heath and safety issues are justified, but they are cumbersome. Some are even regarded as red tape even though they are just a matter of complying with the law. It is, therefore, best if you leave such issues to a specialist who has years of experience in dealing with such matters.
Furthermore, the cost of operating a warehouse is cheaper compared to outsourcing. This is so regardless of the fact that you might have bought or rented the warehouse. You can free up a lot of cash by deciding to switch from an in-house model to an outsourced warehouse model.