Utilizing 3PLs to drive order customization

by | Oct 22, 2019 | Business Growth, Logistics, Suppliers

Sometimes, working in the supply chain can be like herding cats. Between the varying requirements and shifting retail logistics landscape, it’s an ongoing challenge.

Suppliers and manufacturers are generally consistent in how they make their products. They have to be. 

Products must be in specific packaging and shipped based on the supplier’s capabilities. Conversely, retailers may want something different than the standard product, packaging, or shipping method the supplier currently offers.

For example, some retailers require drop ship-capable suppliers to ship orders in retail-branded packaging and with retail-branded forms.

Others may require ASN’s (advance shipping notifications), RFID tags, or even shipping only full truckloads of a product as a requirement.

3PLs help with order consolidation and customization and more

Suppliers that can’t meet all of these requirements are liable to face chargebacks and fines and chalked up to “the cost of doing business.”

3PLs are uniquely able to step in and help manufacturers and suppliers in meeting the custom requirements of the retail customers they serve.

For instance, Walmart requires vendors to ship only full truckloads of products to their docks. The problem is, many of their smaller suppliers can’t deliver full trucks — the orders aren’t big enough, or the products are too small.

 A 3PL can also offer a consolidation service and facility for a smaller supplier. For instance, suppliers can ship their orders to the freight consolidator. 

The consolidator will pick, pack, and send them to the various warehouses on a single truck, meeting Walmart’s requirement, avoiding a chargeback, and any related headaches.

Some retailers require RFID tags in all of their packaging

Here, a manufacturer has two options: installing RFID tags in all of their packages­­––and only programming the ones going to that particular retailer.

Or, they can try to figure out which products are going to that retailer and only include RFID tags in that batch––requiring a manual process to get the job done.

Either way, it can be inefficient and expensive, especially if a single retailer is only 10% of a supplier’s order volume.

Some 3PLs can provide additional customizations, such as repackaging items. Suppliers ship the required number of items, packages, and RFID tags to the logistics firm, who assembles the packages on their behalf. This way, everything is delivered on time and with the RFID tags in place.

Return management and reverse logistics is another benefit 3PLs can provide

Processing returns to the same place orders are shipped can also be a challenge for suppliers.

Often, it makes more sense to outsource reverse logistics to a 3PL who can return entire pallet loads or truckloads to your warehouse for repackaging, recycling, refurbishing, or disposal.

Manufacturers and suppliers, especially those with limited resources, tend to customize a return solution themselves for each retail partner which can result in lots of chargebacks if not implemented correctly.

Instead, they could rely on a third-party logistics partner to meet those custom requirements on their behalf. 3PLs main goal is to keep the supply chain running smoothly and everyone happy.

Are you interested in getting expert help from one of our 400+ pre qualified 3PL partners to meet your retail customers’ requirements? Contact an SPS Commerce representative from our logistics team to get a referral today. 

 

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Tony Thrasher