Why Perform Final Packaging at the Fulfillment Center?
One of the most common weak links in the supply chain is the product packaging process. Typically, packaging of products sold through retail, whether brick and mortar or eCommerce, is completed immediately following the manufacturing process. However, with today’s customers looking for different bundles, colors, or quantities, many manufacturers are tasking fulfillment or warehouse centers to complete their final packaging.
The practice of packaging goods at a distribution center comes with several advantages, along with a fair share of potential hurdles. If completed correctly, however, companies can reduce freight costs, improve consumer product offerings, and expedite delivery cycles.
The main risks involved can be largely avoided by simply choosing a 3PL that can perform efficiently and with the quality of service your customers expect. This is where companies such as Redwood Logistics can be a trusted ally and valuable asset to your supply chain.
In this article, we are going to take a look at a few of the benefits of performing final packaging at the fulfillment center with the help of an experienced 3PL.
What are the Benefits of Performing Final Packaging at the Fulfillment Center?
Supply chains that pass on final packaging to the fulfillment center are blessed with multiple financial and operational benefits.
Here are just a few of the advantages of doing so…
Reduced Freight Costs
Under most circumstances, the manufacturing process involves multiple steps including:
- Product Creation: Whether it’s a pair of pants, bundles of shop towels or any other product, creating the sale unit is the first step in the supply chain. Once raw materials have been secured, and the final product is assembled, the sale unit is almost ready for customers.
- Packaging: In traditional manufacturing, final packaging is outsourced to a contract packaging company. This process involves shipping the products from the manufacturer to packaging. Once this has been completed, the finished packaging is then shipped again to fulfillment.
If you can cut an entire step from that equation and have the fulfillment center complete your final packaging, instead of a dedicated packager, you’ll save a tremendous of money in overall freight costs. This ultimately reduces the overall cost of goods, and likewise increases your profit margin.
Again, a dedicated 3PL can help you facilitate the removal of that step with a fairly smooth transition and without resting all the weight of navigating the process on the shoulders of your supply chain.
Reduced Lead Time
On average, shipping products from the manufacturing facility to packaging takes roughly 7 days. And that’s assuming the two are within a short distance from one another.
What happens in situations where the manufacture is located overseas, but the packaging is in North America? If you ship by sea, you’re looking at 40 days of extended lead time. Air shipping can reduce the time, but at a premium cost.
By having a professional 3PL fulfillment center complete final package assembly, you can reduce your lead time significantly, which helps to improve inventory control and virtually eliminate out of stock situations.
Cost Savings on Labor
There are several elements that impact the cost of goods. One item that is typically bundled in the packaging cost is labor and equipment needed to complete the task.
In a facility that offers full-service packaging and distribution services, the cost of labor is spread through multiple departments. This is because 3PLs cross-train employees, management, and support staff to complete multiple tasks throughout the facility.
Reduced Potential of Damage
Every time a product is moved, the potential of damage occurs. This is especially true in shipping products over sea, air, railway or land. Manufactured products can be packaged in secure containers to fulfillment centers for final assembly. When the sale unit is packaged at fulfillment, it can safely transfer to holding and storage, with a reduced potential of damage.
The growth of eCommerce and omnichannel platforms has introduced multiple opportunities for enhanced sales for proactive-minded brands. In order to meet customer demand, finding creative ways of reducing lead time, improving inventory control and increasing profit margin must be a top priority.
Working with a professional 3PL like Redwood Logistics that can complete final packaging at fulfillment centers simply makes sense. Not only are you able to save money on shipping, improve customer service, and reduce out of stock situations, but also able to maintain accurate inventory levels.
If you’re looking to streamline your packaging and fulfillment process, and looking for an experienced 3PL that can help with final assembly, contact Redwood Logistics today.