Third Party Logistics and Scalability
Strategic use of outsourcing tasks and operations can lead to long-term savings for many companies. However, choosing the wrong business partners – or choosing to perform the operations themselves when the resources and skill levels are lacking – can cripple or bankrupt a company. Companies that anticipate major changes in operations – such as expanding their customer base or anticipating strong growth – should seek a third-party logistic company that can scale its operations along with its clients. Octochem is one such company that can offer customized services that increase clients’ efficiency while reducing clients’ costs.
Failure to Plan Is Planning to Fail
Choosing the best solution requires an honest, healthy assessment of the problems and goals that the company faces. Many start-up companies will be restrained by limited resources and funds. Companies in different phases of their lifecycles will have different needs; a startup company would be less concerned with establishing nationwide shipping routes than a corporation ready to go global. And the nature of the products and materials should factor heavily in how the company handles their logistics.
Risks Associated with “Traditional” Logistic Solutions
Companies that perform their own inventory management and shipping expose themselves to product shortages, product excesses, and the costs associated with increasing or decreasing their facilities and workforce to meet actual customer demands. Small, regional logistic companies are not equipped to scale for large areas or operations. “All-in-one” eCommerce providers often lack the specialized experience and training that many clients require. And hiring Amazon for third-party logistics removes much of the client’s control while providing little – if any – reduction in overhead.
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