In today’s precarious economic climate companies are continuously seeking cost savings. By outsourcing Warehouse and Distribution functions to Southern California Third Party Logistics (Southern California 3PL) firms like Westset Logistics, cost savings are attainable.
How is outsourcing Warehouse and Distribution cheaper than doing it in-house? Cost savings can be achieved by various direct and indirect activities yielding economic leverage.
Capital Outlay
Warehouse and Distribution in-house start up costs will most likely leave you with some form of liability. Warehouse and other real estate such as vehicle compounds are extremely expensive. To operate your own distribution also requires a fleet of trucks and other related material/product storage and handling equipment like forklifts. Warehouse management systems, likewise, incur high costs.
Investing only in core areas like administration and production facilities and contracting Westset Logistics to manage your storage and transportation needs will reduce your costs. Outsourcing as demand dictates transforms a mega non-current liability into a negotiable modest current liability.
Fluctuations in Seasonality
Owing to seasonal peaks and troughs, demand for your product will ebb and flow. The necessary extra overheads during the peaks will be uneconomical to sustain during the troughs.
Temporarily employing a short-term peak workforce will incur the cost of finding, training and managing the labor. Reliability and turnover of this labor reinforces those costs. Moreover, the variable cost of short-term lease of equipment such as forklifts and other Warehouse and Distributional machinery and transportation presents unnecessary high liabilities. This is also the case for short-term leases for additional space requirements. Negotiations for space are even more problematic when predictability of spikes can be wrong.
Westset Logistics neutralizes all the non-essential inflated costs associated with doing it yourself by billing you only for the labor and space you use. The flexibility of this outsourcing is far more viable than the inflexibility of the contracts associated with labor and leases.
Leveraging California 3PL’s Relationships
One of Westset’s core competencies is our vast resource network. Unlike an in-house operation, Westset Logistics has a strategic network in place to be advantageously leveraged. The entire Supply Chain can be effectively used to optimize cost savings and efficiencies. For example these established relationships procure volume discounts and assurance of speedy service.
Mitigation of Non-expertize Costs
Non-expert delivery persons will certainly acquire extra costs associated with goods damages, inefficient fuel use from poor routing and extra time on the clock. Seasoned and reliable professionals will mitigate these overheads.
Similarly, your costs of improving and continually optimizing and upgrading technology will be alleviated. Likewise, the cost of falling behind competitors can cost you in reputation and therefore sales.
Customer dissatisfaction
Lastly, an indirect, inverse cost is customer dissatisfaction. Error free, contented customer service experience is the rule and sub par performance can result in the customer’s migration to competitors. This loss of business is a cost as each diverted sale is ultimately a loss in revenue – an unrealized asset.
It is Westset’s business to maintain customer relationships so therefore this eventuality will be allayed.
Conclusion
Cost savings can easily be made via outsourcing Warehousing and Distribution to third party logistic firms like Westset Logistics. Direct savings by having lesser need for large spending on capital, inefficient cost requisite for unstable demands and savings made by relationship leveraging are all reasons to let Westset be your Supply Chain department. Indirectly, you’ll also benefit by not incurring costs related to non-expertize flaws and loss of sales as an outcome of substandard customer retainment.
So if you would like to widen your profit margin by saving on costs then give Westset Logistics a call and start outsourcing Warehouse and Distribution today.
Westset Logistics is a California 3PL
310-639-0505