Supply Chain Outsourcing
 

In a bid to meet the consumers’ demands and expand the geographical presence, supply chain outsourcing has grown to become mainstream in most companies. The global 3PL market is estimated to reach USD 1.75 trillion by 2026, with a growth rate of nearly 8% from 2020 to 2026.

In Gartner’s Logistics outsourcing survey and analytics, nearly 80% of the respondents aim to increase their outsourcing budgets beyond warehousing by partnering with third-party logistics (3PL) providers who can perform the end-to-end supply chain solutions.

Lara L. Sowinski, editorial director, Food Logistics and Supply & Demand Chain Executive, stated that associating with a 3PL partner results in improved customer care, enhanced integration, and value-added services essential for food businesses. She also remarked that collaborating with an efficient 3PL partner backed with robust technology could be a winning formula for profitability.

The food industry, including FMCG, QSR, and HORECA, looks forward to optimizing its supply chain through a 3PL partner specializing in food logistics services. Outsourcing the supply chain allows businesses to focus on their core competencies and strengthen customer relationships by reducing the hassle of managing their supply chain by themselves.

Scalability

It is critical to work with a 3PL partner who helps scale the supply chain of your food business as you grow. In the food industry, consumer demand is erratic. It fluctuates for various reasons, including seasonal availability, the status of the economy, and the popularity of certain goods over the rest. But the key to a sustainable business lies in the ability to scale up and scale down the supply chain to meet the market’s demands. Having an in-house supply chain makes it difficult to handle the demand fluctuations that might temporarily require an increase in resources. Outsourcing the supply chain to a 3PL partner helps overcome the challenges in dealing with momentary surges and achieve substantial cost savings.

End-to-end supply chain management

End-to-end (E2E) supply chain management involves everything from planning, procurement, storage, transportation, and reverse logistics. Earlier supply chains were focused only on a particular service and remained siloed from the rest. According to Geodis’ Supply Chain Worldwide Survey report, a meager 6% of businesses only reported that they have end-to-end supply chain visibility.

A 3PL partner provides holistic supply chain management integrating all the functionalities. E2E supply chain management enhances network design, brings more visibility and enables collaboration between the various phases to mitigate risks and enhance business operations.

 

High Operating performance

Integrated planning

The food supply chain is driven by consumer demands. A 3PL partner with comprehensive knowledge of demand planning helps reduce wastage and accurately fulfill market needs. Capacity planning is another facet of integrated planning that estimates warehouse and fleet capacity in a fluctuating market. A competent 3PL partner could also provide consumption patterns based on experience supported by technologies like data analytics and Artificial Intelligence (AI). The end-to-end integrated planning assists in reducing unforeseen challenges and preventing loss of revenue.

Efficient inventory management

The risk of perishability and low shelf life makes food products be regularly monitored while storing them in inventories. A 3PL partner can forecast the orders by leveraging data analytics functionalities and monitoring stock levels accordingly. It prevents the goods from going wasted by storing way higher than the actual need. An efficient inventory management system also performs services like order tracking, packaging, labeling, sorting based on expiry dates and codes like First In First Out (FIFO), Last in First Out (LIFO), and analyzing KPI metrics in the warehouse.

 

How does a 3PL partner drive business growth?

 

Collaborating with a strategic supply chain partner impacts food businesses in more than one way, fostering business growth, innovation, and market expansion.

  • A 3PL provider identifies the gaps in your food supply chain and addresses them to solve the complexities and challenges.
  • It makes your entire supply chain more agile and responsive, which is necessary in today’s uncertain market scenario.
  • 3PL partners allow you to focus on your core competencies while they take over the end-to-end supply chain activities.
  • Gain the benefits of optimized inventories and reduced wastage from overstocking, and reduced risk of losing business from understocking through accurate demand planning and forecasting.
  • Associating with a 3PL provider ensures efficient space utilization, improved order accuracy and fulfillment, and streamlined processes.
  • Timely delivery and increased reach improve customer satisfaction which is the critical factor behind sustaining a business.
  • Leveraging the latest technologies to measure, control, and analyze the overall supply chain adds to the advantages of outsourcing logistics operations to a 3PL partner.

 

The complex food ecosystem requires an efficient third-party logistics provider to empower the supply chain with their expertise and contextual knowledge to enhance efficiency, improve performance, and reduce operational costs.

 

RK Foodland is a leading 3PL partner in India that helps in the holistic management of the food supply chain. Mitigate risks and build a resilient supply chain with us to drive business growth.