Reduce Operating Costs by Leveraging These Third-Party Partnerships
A warehouse is layered with multiple responsibilities: ensuring processes are efficient, managing inventory and coordinating logistics and supplying a productive workforce are just a few among many. Without the expertise needed to optimize these processes, you’re at risk for decreased output and rising costs.
Warehouse operators are increasingly looking to the help of third-party providers to fill in where they lack the knowledge of or experience in a certain warehouse function. This enables them to focus more on core business components while still feeling confident that the other functions are being managed effectively.
Do you currently use or have you considered taking advantage of third-party partnerships within your warehouse? Let’s explore how staffing providers, third-party logistics (3pl) providers and technology service providers can bring more expertise to the table and create strategies that lead to cost reduction.
Contingent Staffing Partnership
A staffing firm recruits and manages your contingent workforce delivering increased scalability and flexibility to your warehouse operation. Staffing providers specialize in sourcing talent in tight labor markets and are often able to implement a much more robust recruitment strategy than your internal recruiting or HR team.
There are many different staffing solutions available, so it’s important to evaluate which is the best fit for your operational needs. For a high-volume or constantly fluctuating contingent workforce, it’s best to use an onsite staffing partner that is solely dedicated to your operation’s workforce needs. On the other hand, a branch-based staffing provider may be best if you only need a handful of temporary workers to complement your full-time workforce.
If you opt for an onsite staffing partnership, you’ll benefit from the ongoing workforce performance management that your service team provides which helps to boost productivity and reduce safety risks.
How you save money: The workers are employed by the staffing firm so the costs associated with recruiting, hiring and providing benefits aren’t coming out of your pocket. The increased precision in labor forecasting that a staffing partner provides also helps to mitigate costs.
Technology Service Partnership
Technology drives efficiency and helps build a lean operating model, but it can become challenging to keep up with the most recent advancements and connect to other systems in your warehouse without an experienced partner.
Warehouse equipment supplier CubiScan, for example, provides dimensioning systems for warehouses. A dimensioning system, which can be seen in action in the below video, quickly determines your package’s dimensions and is recommended as UPS and FedEX recently updated their shipping rates to factor package dimensions into the final shipping cost.
A cloud service provider is another strategic partnership worth considering. A cloud service provider can easily find, purchase and install the right hardware specific to your warehouse need. Any maintenance and upgrade issues that may develop can also be quickly resolved by this partner.
How you save money: Warehouse technology supplier Zebra found that the picking and replenishment process, including the labor needed to carry out this function, accounts for as much as 70 percent of operating costs. Technologies such as wearables, hand-held devices, technology-equipped vehicles and mobile platforms can reduce this cost.
Partnering with a 3pl can be a more cost-efficient route as warehouse rental rates continue to soar and space becomes harder to find. A 3pl can manage the entirety of your fulfillment and distribution operations including storing your inventory, picking and packing single orders and building pallets for distribution. An experienced 3pl can also provide you with improved inventory forecasting to help you optimize your inventory levels and not become hampered by overstock.
Outsourcing your warehouse operation to a 3pl is a good option if you don’t have the capital to invest in an additional warehouse or you lack the in-house resources and expertise to run your warehouse as efficiently as possible.
This is also a helpful option for midsize companies operating on a budget that doesn’t allow them to invest in upgraded warehouse technologies. Some 3pls are equipped with the latest technologies and systems that can give you a competitive edge.
How you save money: Partnering with a 3pl eliminates major capital investments and maintenance costs. Some have found that utilizing a 3pl can reduce logistics costs by as much as 9 percent, depending on your negotiations.
Partnerships for Lean Operations
You may feel hesitant to hand over certain functions of your operation to another company, but partnering with other skilled organizations can make your operation leaner and more efficient. Outsourcing your staffing, technology or even your entire warehouse operation allows you to focus more on your business’ core competencies.