Some of the issues various supply chain stakeholders have had with keeping items on the shelves trace back to their inventory management practices. Though inventory management is critical to successful supply chain management, many businesses struggle to scale their inventory management capabilities with their sales growth. As a result, such organizations find themselves reliant on insufficient processes long past the point where they should’ve implemented technology and automation.
Some signs that your inventory management capabilities need work may include:
- Experiencing frequent stockouts
- Regularly discovering stockouts when trying to pick the order
- High volumes of old, unsold inventory taking up space
- Heavy reliance on paper-based or manual inventory practices
- Discrepancies between different systems regarding inventory volumes
- Lack of benchmarks/metrics you can use to identify areas for improvement
Partnering with a 3PL is one of the fastest, most efficient, and most cost-effective ways to streamline inventory management.
How Can My 3PL Help with Inventory Management?
A good logistics partner will provide a multi-faceted approach to help you overcome inventory challenges. Some of the ways your 3PL can help may include:
- More warehousing space. With warehousing space at a premium all around the United States, carrying enough inventory to meet demand can be difficult. This problem has become even more prevalent in recent years, with supply chain problems requiring more retailers and manufacturers to carry safety stock if they hope to avoid disruption. Using a logistics provider with a broad network of facilities can help you access the space you need and strategically locate your inventory nearer to customers.
- Ready-to-go software. A 3PL should have software to help you improve your inventory practices, such as warehouse management systems (WMS) and enterprise resource planning (ERP) solutions. These solutions will interface with your existing technologies through electronic data interchange (EDI) or application programming interface (API) to help you gain an accurate, real-time view of inventory levels.
- Scalable automation. Not every warehouse needs massive conveyor belts or robotics to manage inventory successfully. Your automation needs depend heavily on your industry, inventory type, and other specific needs. A logistics partner can help you determine the right amount of automated and semi-automated technologies to help you streamline your inventory management capabilities. Better yet, it can scale those capabilities up as your business grows.
- Optimizing your carried inventory. Many supply chain stakeholders have opted to move from Just-in-Time strategies to Just-in-Case inventory management practices. This shift means stocking excess inventory to avoid stockouts in the face of disruption. Unfortunately, carrying extra stock drives up associated storage and handling costs, and identifying the right amount of safety stock for your needs can prove difficult. Your 3PL can help you determine the ideal amount of safety stock to keep on hand without driving up storage costs unnecessarily. Conversely, it can help you determine if Just-in-Time inventory can still work for your business.
- Identifying cost-saving opportunities. Through optimized inventory management, you won’t have funds tied up in unnecessary inventory. Your logistics partner can assist you in identifying slow-moving inventory items—or obsolete inventory that won’t sell at all—allowing you to liquidate unnecessary stock so you don’t waste money paying to store it.
- Providing labor for inventory checks. Even if your inventory management processes become heavily automated, you will still need to verify inventory levels every so often physically. With a labor shortage straining many warehouses, it can be difficult for many shippers to keep up with physical inventory inspections. A 3PL takes that burden off your plate and ensures regular checks happen on schedule.
Working with a logistics provider to enhance your inventory management capabilities offers numerous benefits, including better cash flow, freeing up internal resources, accessing technology without a high upfront cost, and much more.
About Phoenix Logistics
Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s needs.
Mr. Frank P. Crivello began his real estate career in 1982, focusing his investments in multifamily, office, industrial, and shopping center developments across the United States. From 1994 to 2008, Mr. Crivello assisted Phoenix Investors in its execution of its then business model of acquiring net lease commercial real estate across the United States. Since 2009, Mr. Crivello has assisted Phoenix Investors in the shift of its core focus to the acquisition of industrial real estate throughout the country.
Given his extensive experience in all aspects of commercial real estate, Mr. Crivello provides strategic and operational input to Phoenix Investors and its affiliated companies.
Mr. Crivello received a B.A., Magna Cum Laude, from Brown University and the London School of Economics, while completing a double major in Economics and Political Science; he is a member of Phi Beta Kappa. Outside of his business interests, Mr. Crivello invests his time, energy, and financial support across a wide net of charitable projects and organizations.