Today’s omnichannel shoppers expect options like free shipping, expedited deliveries, store pick-up, ship to store and return to store. That can make order fulfillment very challenging.
To meet the needs of an omnichannel environment (or simply expand to accommodate sales growth), retailers and ecommerce companiesneed to move products through the supply chain faster, get them closer to the end customer and minimize transportation costs.
Traditional distribution networks often lack the efficiency and flexibility necessary to accommodate omnichannel distribution. To meet their omnichannel customers’ escalating expectations, companies may require more than one DC. In fact, the multi-site distribution model is becoming more and more common.
This distribution model can be costly to implement, however, as it requires a significant investment in space, labor, technology and inventory. Many companies find that a third-party fulfillment provider can help them to overcome this barrier.
How Can I Add More DCs to Satisfy My Omnichannel Customers?
A third-party provider can be a valuable resource when you want to expand your DC network. Here are three reasons why.
1. Optimal DC network configuration. An experienced third-party provider will take a strategic approach to network configuration and help you determine the right DC locations for optimal efficiency for your current and future business.
You’ll have access to your provider’s established distribution network without adding to your overhead expenses. As a result, you can ship available inventory from DC locations closest to your customers, helping to reduce transit times and control shipping costs. If you outgrow your DC network, it’s much easier to expand with a 3PL.
2. Advanced technology. A qualified provider should have sophisticated technology solutions in place – order management (OMS), warehouse management (WMS), and transportation management (TMS). You’ll have state-of-the-art systems at your fingertips without the eye-popping price tag.
A robust OMS is particularly important for companies utilizing a multi-site distribution model, as it enables them to see inventory across their entire enterprise — warehouses, stores and vendors (for drop shipments) – and determine which fulfillment source to pull from for the fastest and most affordable service.
3. Expertise and best practices. A knowledgeable provider will take time to learn about your supply chain priorities and understand the bigger picture, so they can design a solution that addresses your real issues and delivers the best results. When it comes to implementation, they’ll have proven processes in place and knowledge of best practices, so they can get operations up and running quickly.
With the support of a 3PL, you’ll be ready to give your customers the distribution options they’re looking for – and maybe even some they didn’t realize they needed.
To learn more about how outsourcing can help you to address a variety of common business challenges, read our new ebook: the Ultimate Fulfillment Outsourcing Guide.