Blog Posts How Can Your 3PL Help to Prevent Supply Chain Disruptions?
Still reeling from supply chain disruptions related to the COVID-19 pandemic, many companies are evaluating their potential for future risk with an increased sense of urgency. “Risk management is not a ‘nice to have’… it’s a ‘must have,” explains Rich Thompson, International Director, Supply Chain & Logistics Solutions at commercial real-estate firm JLL.
A third-party logistics provider (3PL) can play an instrumental role in this essential process, helping companies to identify and address possible trouble areas. In his new blog for Multichannel Merchant, Saddle Creek’s vice president of business development Jeff Jones explores ways in which a 3PL can value.
Following is an excerpt…
6 Ways 3PLs Help to Mitigate Risk in Wake of COVID-19
For support in retooling their supply chain, many companies are turning to third-party logistics providers. In fact, 12.4 percent of organizations intend to increase their use of third-party logistics in the wake of COVID-19, according to a recent survey by the Business Continuity Institute.
Utilizing a 3PL can help to mitigate risk for a number of reasons:
- Essential Status
During the coronavirus pandemic, state mandates to close non-essential businesses brought operations to a standstill for many companies. However, transportation and logistics is deemed a “critical infrastructure industry” by the Department of Homeland Security, so many 3PLs were required to maintain operations. This mandate allowed them to keep operations running for their clients even when the clients themselves had to shutter their doors due to the virus. Going forward, 3PLs will continue to retain this essential status.
The pandemic revealed the risk associated with housing an entire inventory in a single distribution facility. If that facility is forced to close due to infection or additional mandates, operations could come to a grinding halt. With high likelihood for future waves of the virus, many companies are adding facilities in multiple geographies, so they can distribute inventory across multiple locations to expand their warehousing and distribution options.
Utilizing the resources of a third-party partner can help companies to avoid the overhead investment for additional facilities. An established 3PL is likely to have existing DCs in strategic locations with the requisite staff, equipment and technology in place to operate them.
- Flexible Facilities
As social distancing has become the new norm, logistics and fulfillment operations now need a significantly larger footprint to allow six feet between employees – not just on the warehouse floor but also for break areas, restrooms and offices.
Because 3PLs tend to have larger facilities, they often are better prepared to scale to accommodate distancing requirements. They can flex to meet their clients’ demands – temporarily or for an extended period of time.
For more ways that 3PLs can help to mitigate risk, read the full article on Multichannel Merchant.