Blog Posts Q&A: What Can Your 3PL Do to Help You Reduce Risk?
- Virtually every supply chain has been affected by disruptions related to COVID-19.
- Retailers and ecommerce companies should take steps now to mitigate risk.
- 3PLs are well positioned to identify and address potential risks.
The coronavirus pandemic triggered supply chain disruptions across the globe. In fact, 97% of companies have been impacted, an Institute for Supply Management survey shows. The experience has prompted many retailers and ecommerce companies to reevaluate their operations and seek out ways to better mitigate risk.
In a recent conversation with Digital Commerce 360, Saddle Creek vice president Jeff Jones discussed what companies can do to reduce supply chain risk and how third-party logistics providers can help.
Following is an excerpt from the Q&A…
Effective Risk Management Improves Fulfillment & Delivery in Challenging Times
DC360: How can retailers and ecommerce companies retool their supply chains?
JJ: With considerable uncertainty ahead, it is important to take steps now to mitigate supply chain risk. Diversification can be one effective strategy. Instead of housing an entire inventory in a single distribution facility, it may make sense to add distribution facilities in multiple geographies.
It can also help to think about how and where functions like kitting and assembly are handled. Moving those processes closer to the consumer can increase flexibility, improve responsiveness and mitigate risk.
Also, all signs indicate that consumers will continue to shop more online. Greater volume of ecommerce orders generally requires more space and labor as well as specialized facility design, technology solutions and shipping strategies. Companies need to ensure that they have the resources they need to deliver a positive online shopping experience.
DC360: What are the benefits of partnering with a third-party logistics provider (3PL) to avoid supply chain disruptions?
JJ: A 3PL can play an instrumental role in helping companies to identify and address potential risks and pivot as needed to accommodate ever-changing requirements.
3PLs are likely to have established facilities in strategic locations to help their clients distribute inventory across multiple locations. With a flexible workforce at the ready, 3PLs can better accommodate fluctuating order volume. They may also incorporate automation and robotic solutions to reduce labor dependency.
Using a 3PL’s space, staff and technology can allow companies to be more responsive to the ecommerce marketplace without making a significant overhead investment. And since transportation and logistics is designated as a “critical infrastructure industry,” many 3PLs can continue operating even if their clients are required to shut down.
To learn more about minimizing risk, read to the full article on page 23 in the October issue of Digital Commerce 360.
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