3PL Partnerships: You Can't Do It All Alone

3PL Partnerships: You Can't Do It All Alone

You cannot multi-task your way to success.

According to the Center for Cognitive Brain Imaging (CCBI) at Carnegie Mellon University, multi-tasking as we know it is a myth.  Scientists have shown that spreading your attention between multiple tasks overwhelms your brain, decreasing efficiency and increasing errors.  In other words, the more you try to do at once, the less effective you are.  “People performing two demanding tasks simultaneously do neither one as well as they do each one alone,” says Dr. Marcel, psychology professor and co-director of the CCBI.

Applying the CCBI results on a corporate scale, it stands to reason that companies who stretch their resources in order to keep all business functions in-house experience a reduction in efficiency, increased costs and lower employee morale.  By not outsourcing and refocusing on your core competencies, you may be hurting your company.  For an increasing number of businesses, logistical and distribution services are the first to be considered for outsourcing.  

The “2014 Third-Party Logistics Study”, an annual study of the 3PL industry conducted by Penn State University, found that when switching to a 3PL “shippers report an average logistics cost reduction of 11%.  The average inventory cost reduction is 6% and the average fixed logistics cost reduction was 23%.”  As you can see, you may be missing out on some serious savings. 

Additionally, leveraging a 3PL will allow you to shed the assets required to manage a warehouse and transportation division.  Virtually overnight, companies can move distribution and logistics from a fixed cost structure to a variable cost structure, eliminating the following expenses: warehouse lease, specialized labor, warehouse utilities, WMS software licenses, insurance, and equipment.