Manufacturing companies spend a great deal of time looking for ways to beat their competition in new and innovative ways, whether it is through new manufacturing processes, better products or improved supply chain management. Manufacturing industry supply chain management can be difficult as you try to keep costs low and deliver goods and services to the customer in a timely manner. Fortunately, third-party logistics (3PL) providers offer many services that will improve a manufacturers’ supply chain.
Here are five reasons why a manufacturer should consider using a third-party logistics provider to minimize transportation costs and deliver freight in a timely manner:
Better Routing Management
Logistics for the manufacturing industry comes down to proper routing management. A 3PL provider will conduct the optimal route for a business once the manufacturer has determined the origin and destination for each shipment. A 3PL provider is equipped with the necessary tools to suggest the best carrier for a particular route, based on cost-effectiveness, customer service and whether they can meet your business’ delivery needs.
In addition, a 3PL logistics company offers a quick way to re-engineer distribution networks in order to meet an increasingly global market and gain an edge over competitors.
Retailers have a different view on shipping costs than manufacturers. Retailers see the cost of shipping as items are sent to them. However, manufacturers focus more on the cost of shipping items out to vendors. A 3PL logistics company assists with bills-of-lading and freight scheduling to reduce the costs of shipping products to your vendors.
In addition to reduced shipping costs, by outsourcing to a 3PL logistics partner, you can eliminate payroll, benefit and liability costs that are necessary with in-house staff. There is also no cost for fleet maintenance, insurance or equipment upgrades, which are common expenses found when working with logistics in the manufacturing industry.
Freight Bill Auditing
Freight invoices are normally sent to the 3PL provider, who then bills the manufacturer. The 3PL provider will audit each invoice for proper class and discounts before they send an invoice. This frees up time for manufacturers’ accounting departments as employees no longer have to audit each invoice for accuracy. As many as ten percent of all freight invoices have errors in favor of the carrier, so audit invoicing is critical to confirm that manufacturers are being charged properly. Click below to learn more about our Freight Bill Auditing service.
It is not unusual for 3PL providers to consolidate invoices on a weekly or monthly basis. Consolidated invoices have the same information as the invoices sent from the freight companies, but with all the information included on one bill. That means paying just one bill, either each week or each month, as opposed to paying for each shipment separately. Although most shipping invoices have a net-15 term, some 3PL providers offer extended payment terms on consolidated invoices. This can be a significant benefit for the manufacturer, as both a time and money saver.
Improved Customer Service
Manufacturer logistics practices are all about getting products to customers in a timely manner. A third-party logistics provider best works with manufacturers to manage supply chains and move inventory to customers quicker and at less cost. Manufacturers will also have more accountability outsourcing to a 3PL partner as well. A good logistics company will take responsibility for caring for your customers and your products as if they are their own, meeting you own high performance standards.
Logistics for the manufacturing industry may be complicated, but it does not have to be. Partnering with a 3PL provider for all your logistic needs can save money, provide better customer service and reduce the workload for your accounting department.
For any manufacturers interested in building a relationship with a customer-focused logistics provider, consider 3PL company Land-Link Traffic Systems. We have more than thirty years’ experience working in the transportation management and logistics industry—and are well versed in best practices for streamlining a manufacturers’ supply chain. Click below to learn more about our 3PL logistics services.