Instead of manufacturing the parts or products in-house, companies opted to outsource the items from outside vendors. Using one fulfillment center can make it difficult to efficiently reach your consumer base. Instead, distributing your inventory across major hubs or cities can ensure you ship to lower shipping zones, delivering orders more quickly and with less cost. If your 3PL has multiple fulfillment centers they should be able to help you determine the best fulfillment center locations based on where your customers are located. This can help you store your physical inventory in the most advantageous locations.

  • That is, outsourcing non-core operations may result in improved productivity and efficiency.
  • I had the pleasure of working with Haroon for two years on Sarbanes Oxley internal control implementation projects.
  • We can make your business agile enough to help answer any fluxes in demand, without compromising on the quality of service by using an assortment of demonstrated techniques.
  • Many companies develop a single source of supply from where the needs of the material can be fulfilled.
  • Therefore, integration with a shipment tracking service can help you fulfil that requirement.

You’ll want to think about the short, medium and long term possibilities before making your decision. If you do go ahead, could give you more time and freedom to build your business. Real-time integration with the central and multi-layer backend system, like an ERP or WMS software, ensures accurate information across geographically distributed locations. Also, live mobile inventory control connects multiple facilities in a unified supply chain.


(Read our guides about POS retail software and efficient inventory management systems to learn more). Bear in mind that your knowledge in this area is partly what gives your business an edge. Lean inventory management is an operations model of having a sufficient minimum of inventory to cover the demand.

Outsourcing Inventory Management

Number one is often best done in-house, since you and your key employees understand your business well. You can decide where your business is going, which products will sell well and which won’t. Keeping track of your figures is key to your account health and maximizing your profits.

Which inventory management tasks do you need to keep in-house?

Our experts help you in optimizing and managing your inventory operations which include cycle stock, safety stock, pipeline, and pre-built inventory. We can make your business agile enough to help answer any fluxes in demand, without compromising on the quality of service by using an assortment of demonstrated techniques. Our specialists make use of just-in-time (JIT) strategies, and scheduled demand indicators, that assist you in improving stock efficiency and customer support.

  • Our inventory strategies cover a wide variety of industries; from retail, grocery and manufacturing to medical and pharmaceutical.
  • These sales forecasts should be linked to your stock management to ensure you are prepared for peak sales periods and trending, seasonal products.
  • As we mentioned above, having accurate insights about your customers’ purchasing trends can help you figure out the optimal inventory levels for your products.
  • Lean inventory management is an operational philosophy that emphasizes maintaining a minimal amount of inventory to meet demand.
  • Numerous businesses establish a single supply source for the materials they need.

A 3PL can offer flexible warehousing, allowing you to use more space during peak periods and less during your off-season. At Red Stag Fulfillment, we use a cubic storage model, so you pay only for the space you need each month. The primary method for outsourcing inventory management in eCommerce is to work with an eCommerce fulfillment company. Your fulfillment warehouse can handle many of your essential inventory management functions.

Demand and Supply Planning

You can set automatic  notifications to alert you when stock levels reach a certain point, reminding you to restock. If that number dips too low, you run the risk of running out of products which can lead to  missed sales, backordering, and customer service issues. On the flip side if you have too much inventory, it can result in having products that can no longer be sold due to decreased demand or being outdated.

Outsourced Logistics: Choosing a 3PL or a 4PL? – Supply and Demand Chain Executive

Outsourced Logistics: Choosing a 3PL or a 4PL?.

Posted: Sun, 11 Jun 2023 10:00:30 GMT [source]

Our customers have access to a broad network of industry partnerships, EDI connections, retailer relationships, ERP, and ecommerce integrations. Haroon is a person with wide range of expertise in accounting, reporting, projects management and systems. EA’s remote supply chain professionals are professionally comparable to their US counterparts but cost a fraction only.

At Red Stag Fulfillment, we can even take a photo of a return and send it to you so that you can assess the next step with the customer and your inventory. One of the most significant benefits of outsourcing inventory is flexible storage space. You don’t have to lease warehouse space and run the risk of your stock not fitting or paying for empty floor space.

Outsourcing Inventory Management

Outsourcing is the process of contracting with a third-party service provider to fulfill specific activities. On the other side, insourcing assigns a business process or project to a person or department within the organization capable of handling that particular task. The critical contrast between outsourcing and insourcing is whether the job is delegated inside or outside the organization. In addition to professional order fulfillment, your 3PL can bring skills to your inventory handling.

Tata Motors is the prominent example that uses the outsourcing inventory system. It has developed several ancillary units around its manufacturing plants to get the parts and components in time. This has benefited the ancillary units as well, with the help of Tata Motors they are able to manufacture the best quality components. Likewise, Tata Motors, Maruti, an automobile company, uses this inventory system to fulfil its need for the components.

  • A drop ship company is a wholesale organization, or sometimes a manufacturer.
  • We help in identifying the stock-keeping unit (SKU) of an item, the manufacturing code, product code, and item attributes (colour, size, measurements, etc.).
  • Sharing information in an electronic format cuts down on administrative time and confusion, and allows changes to be made quickly when needed.
  • Connect with our sales team to learn more about our commitment to quality, service, and tech-forward fulfillment.
  • At the same time, other companies assist in developing small- and medium-sized auxiliary units that provide the essential quality parts for finished products.

Instead of employing a third-party company, insourcing gives a project to a person or department within the organization. It uses the organization’s internal resources to carry out activities or accomplish a goal. For example, a business may already have well-developed technical support teams handling mobile product support. If the company launch new products for other devices, then support task can be assigned to the same team instead of looking for an outside service provider. We’ve seen Red Stag Fulfillment clients increase their profits and expand their businesses. That’s thanks to the money they saved due to reduced shrinkage and professional inventory handling, in additional to accurate order fulfillment.

We are always ready to extend a helping hand with inventory management—or anything else you need to improve your fulfillment. Fulfillment warehouses use warehouse management systems that include state-of-the-art inventory management software, and you get the benefit of that. You may be able to view your stock on hand in real-time and get reporting to help you set reorder points and safety stock levels. At Red Stag Fulfillment, our client dashboard puts all the information you need to manage your orders and inventory at your fingertips.

Outsourcing Inventory Management

Also, it enables an organization to capitalize the manufacturing efficiency of others, which could not have been possible, if manufactured internally. A drop ship company is a wholesale organization, or sometimes a manufacturer. For five years, I had the pleasure of working with Haroon Jafree at Sabra Hummus. During this time the company was transformed from a small startup to a high-performance company with highly automated processes and systems. Haroon worked on numerous business process reengineering projects with great success achieving significant savings both in the accounting / finance, and operations.