Why do warehousing companies outsource certain tasks?
The commercial world is ever more complex and smart companies know they can’t do everything. Outsourcing is all about buying in products and services to form part of your own service to clients. Traditionally this used to be components in manufacturing, but in recent years the big growth has been in services, both internal and external to the company. Now outsourcing is as big as you can imagine and is still growing.
There are countless advantages to outsourcing in terms of costs as to what businesses can offer to clients and how the company can reduce their own risks and commitments. It allows a company to play to its strengths and stay flexible. In short companies would be missing something it they didn’t, but businesses must beware of losing that personal touch with clients. Companies need to ensure that they stay on top of data security and don’t lose control of vital aspects of the business. Watch out as well for any ethical issues that might come from sourcing cheaper from abroad.
What do warehousing companies outsource?
If warehousing companies are the big providers of storage and logistical service to their customers, why would they need to outsource? Basically, there are better services to be had through the specialization of an umbrella company and therefore a better deal they can offer their own customers.
A big plus to outsourcing warehousing is that companies can access real value-added services that one company alone would struggle to provide. The warehouse distribution process is a perfect example. A specialist can offer up-to-the-minute tracking facilities, inventory control and reordering services. The best providers are large enough to offer extra capacity and flexibility in real time, but small enough to respond with personal service that meets clients’ specific needs.
Outsourcing warehouse distribution may even go a step further and provide better product grouping and organization, or some types of assembly. In other words, companies are buying more than just storage space.
The undeniable advantages of outsourcing.
Costs are paramount and warehouse space that is under-utilized is an inefficient waste of resources. There are valuable economies of scale to be had with shipping and storage services and much greater flexibility to adjust capacity at short notice.
Like any other company, warehouse providers can benefit from reducing their capital outlay, insurance and risks. There are major costs saving too often in contracting out IT services, payroll and customer care provision.
In warehousing businesses can offer much greater expertise and professionalism to their clients by demonstrating that they use the latest technology in distribution and organization.
Also, outsourcing is a great way to build international business, which is where market knowledge is key. Outsourcing part of a business abroad allows companies to build up local knowledge and provide a better service to foreign clients in return.
Cost control is vital, but so is professionalism. In warehousing you can demonstrate worth by being both big and flexible if you outsource wisely and pass the benefits onto your clients.
FW Warehousing is headquartered in St. Louis, Missouri with Midwest warehouse distribution centers in Kansas City, Indianapolis and St. Louis totaling more than four million square feet. Founded in 1949 with a focus on food-grade storage, FW later broadened its services to include contract warehousing, dry storage, hazardous material and chemical storage, temperature-controlled storage, product distribution and B2B and B2C fulfillment.
FW Warehousing has more than 50 years of experience in third-party 3PL logistics and has been ranked in the top 100 Third Party Logistic Companies in the country by Inbound Logistics magazine.
For more information about FW Warehousing and its complete warehousing, fulfillment and logistics capabilities, visit the FW Warehousing website.