Having a good warehouse management system and proper inventories is the need of the hour for every company who wants to deliver the products to its customers without any snags. If you are also thinking of hiring a 3PL logistics company that has an efficient warehousing and inventory management in place then you should know that it will be worth the time and trouble. How? Find out below.
Benefits of Efficient Warehousing
Wide Array of Services
Warehouses don’t just store your products, they also offer other value added services like packing, installing, delivering, reverse logistics management, etc. This allows you to not hire any executive for warehouse management in house and be assured that the work will be done with perfection.
With the help of a good warehousing system, your company can easily enjoy stable pricing as the prices won’t fluctuate due to changes in demand or supply. The warehouse will store goods when supply rises suddenly and surpasses demand and will release them when demand increases production. Stable pricing would help you to accurately forecast production, profit, and loss.
Many people are not aware of the fact that bonded warehouses which are licensed by the government can accept imported goods until custom duty can be paid. This allows you as a business owner to control costs by paying the required customs duty proportionally.
If you are a manufacturer who produces only seasonal products then you can opt for spot stocking in which you don’t need to stock the goods in a warehouse for the whole year, you can just stock the products for some duration. Most companies prefer to do spot stocking by storing their goods in various locations close to the customer base so that product demand can be instantly met.
If you hire a 3PL company that provides efficient warehousing and inventory management, you will benefit by sharing the risk factor with the outsourcing company. The company will be responsible for loss or damage of goods during storage or transit so you won’t have to pay any money for unforeseen inventory loss.
Benefits of Inventory Management
It will help you to understand how much inventory you need at any time which will lead to fewer product shortage situations, surplus goods. If the goods are perishable, an excess of them can cost you a lot of money.
Better Warehouse Management
If a warehouse has only that number of products which it can easily store it will ensure that the products are found and delivered quickly which will surely make the end customers happy. The percentage of loss of goods will also go down as no product would get lost among the masses of products in a warehouse.
Well Planned Production
If you already know a number of goods at a warehouse at any point of time, it lets you plan the production accordingly. You don’t produce more than you can sell and hence the wastage would be reduced. The money wasted on slow-moving products could also be saved.
Human Resource Benefit
When the inventories are managed via a good software, you can be sure that the reports that are being generated are accurate and you won’t have to hire someone to count inventories manually in each of the warehouses you have hired. This will save you human resource management costs and you will stay away from the trouble of hiring an in-house inventory manager.
More Repeat Customers
When the inventories are managed in the right manner, the customers get happier with the deliveries which boost their trust in your company and you get to reap the rewards of having many repeat customers. The well-managed inventory also leads to fewer erroneous and damaged products deliveries which further save costs associated with reverse logistics.
On the whole, it is quite clear that the benefits of efficient warehousing and inventory management are far higher than the costs associated with hiring a 3PL provider.