Posts Tagged ‘protection’

According to Armstrong & Associates in their newly released report “Trends in 3PL/Customer Relationships – 2009″, seventy-seven percent of Domestic Fortune 500 companies use 3PLs for logistics and supply chain functions.  Now this is a lesson in success for the rest of the corporate America.

Why would 77% the biggest and best of U.S. business outsource such a critical function as supply chain management?

There are many reasons.  One of the most common is that the 3PL’s can do a better job than the company can do themselves.   In fact, they can perform at a level that justifies their fee they add on top of the cost of running the supply chain function. Often companies use 3PL’s to leap frog technology, instantly benefit from best practices, or effectively hire some of the best leaders in the supply chain industry.

There are a bunch of other benefits to outsourcing that you should consider. One is that outsourcing allows your business to focus on your core competencies like customer service, or manufacturing or marketing or merchandising.

Outsourcing can in effect be an insurance policy against shrinkage, worker compensation claims, and  level of service performance issues.  Using a 3PL can act as a protective shield to the rest of business against any labor issues emanating from the outsourced area.

Last but not least, outsourcing can provide flexibility and scalability in areas that typically require significant long term capital investment. Whether you are in the middle of a bear market or a bull market, having flexibility, protection, and options when managing capital intensive functions can have far reaching financial and competitive benefits.