Network Optimization: How 3PLs Achieve Perfection
Companies work hard to streamline their processes to ensure that every phase of shipping is as efficient as possible. One way that some manufacturers stay ahead of competitors is through network optimization.
Network optimization is the process of reviewing all steps, tools, phases, resources, procedures, and partners involved in the daily operations of a business. One area that all companies struggle to optimize is their supply chain. Luckily, that is where a 3PL company comes in really handy! A solid 3PL steps up to the plate to help companies optimize and streamline their complete supply chain network.
Companies can benefit from the expertise of a 3PL by having them review and fine-tune their network. This generally includes everything from the carriers they use, to the materials they package, and everything in-between.
In this blog post, we will take a look a few of the benefits of working with a proven 3PL to optimize your supply chain network.
What is Supply Chain Network Optimization?
Supply chain network optimization is a service provided by experts – such as a third-party logistics company. During this process, they review the tools, technologies, carriers, procedures, and resources that are used to move your products throughout the supply chain. The goal of supply chain network optimization is to not only review these key points but to also reduce overall waste.
The process of optimizing any supply chain begins with a full and complete audit. A reputable 3PL will work with a company to determine its current goals, consumer base, individual product line, hurdles, and objectives.
During this audit, your 3PL looks at numerous operational roles. These roles could include manufacturing, inventory control, accounts receivable, inbound shipping, raw material storage, warehousing, and of course outbound shipping.
Once the audit is complete, the 3PL will review the company’s carriers, tools, and resources. Lastly, the 3PL determines what services and expectations their customers have. From there, it is simply a matter of the company putting the 3PL’s recommendations into place.
A few of the Benefits of Supply Chain Network Optimization
Find Areas of Waste
We mentioned this at the beginning of this blog post, but let me expand on it a bit further… Waste is the root of all evil in any company that ships goods.
Within the supply chain, several opportunities for wasted resources exist. The problem is, without knowing where to look, it’s impossible to determine the root source of waste. Fret not though, this is an expert-specific offering that a 3PL provides during their initial audit.
The 3PL reviews the tools, procedures, and supply chain partners the company utilizes. This helps them not only discover the root source of the waste but also to recommend the right changes. Those changes should be focused on eliminating the problem altogether.
And thus, the optimization of the network begins.
Drive Down Costs
There is a huge difference between cutting costs vs spending money smartly. One of the biggest problems that manufacturers, retailers, distributors, and anybody who ships products daily have, is reducing expenses without compromising quality. This is one of the most crucial benefits of network optimization.
A proven 3PL can review your inventory control procedures, training, freight auditing, and billing. Once complete, the 3PL makes suggestions regarding the proper allocation of the company’s money.
When waste is found, instead of slashing expenses blindly, your 3PL focuses on allocating the budget better. In the end, this helps to drive down the cost of operation, improve profit margins, and increase customer service quality.
Companies understand the value of working with partners in areas they simply don’t feel comfortable modifying or have time to deal with daily. Essentially, this is the biggest benefit of working with an experienced 3rd party logistics company like Redwood Logistics.
Our goal is to build relationships with our partners – which begins with a simple conversation.
If you have questions about supply chain network optimization, please don’t hesitate to contact us directly.