Remember when the very idea of selling your product in Asia or Europe seemed like a pipe dream? It actually wasn’t that long ago for many businesses. Even as recently as 10 or 20 years ago, global distribution was a fantasy for all but the biggest and best-funded businesses.
All that has changed in the last 10 to 15 years. The rise of the internet, the opening and loosening of global trade, and a wide range of other factors have now made global distribution possible for nearly any company, whether they’re consumer, industrial, or even B2B. From Asia to Europe to Africa, if there is demand for your product or service, the tools and resources are available to meet it.
A third-party logistics company is an outside partner who manages every aspect of your distribution chain, from warehousing to packaging to logistics and even quality control.
Of course, that doesn’t mean global distribution is easy. Far from it in most cases. You may have products coming out of multiple facilities that needs to go to several different countries. Some of those products may ship immediately while others need to be warehoused. You have to manage air and ship freight through various ports, navigate custom requirements, and control your process as your product works its way around the world.
Even with all of the technology available today, global distribution can be a complex process. That’s especially true if you’re handling it in-house. After all, you’re not a global shipping and logistics expert. You’re skilled at serving your customers and producing your products. That’s what you do best. So why are you allocating so many resources in your facilities to managing a complex function like your global distribution chain?
One alternative is to use something called a global hub warehouse. With a global hub warehouse, you ship all your product to one central facility — the global hub. From there, your parts and products are either packaged and shipped to their destination or they’re warehoused for future distribution. If they’re warehoused, they can be easily pulled, packaged, and shipped on a moment’s notice.
You can run your global hub warehouse yourself, but you also may want to opt for to partner with a third-party logistics company. A third-party logistics company is an outside partner who manages every aspect of your distribution chain, from warehousing to packaging to logistics and even quality control.
If you opt to partner with a third party, you’ll obviously want a firm that has global experience, especially in your markets. You’ll also want a partner who helps with strategy and distribution design, not simply executing the required tasks. The best third-party logistics partners are those who can analyze your process and implement improvements to boost efficiency and profitability.
Why implement a global hub warehouse into your distribution chain? And why partner with an experienced third party? Below are three of the biggest benefits.
1. You can refocus your resources.
As is often the case when you outsource a function to a trusted partner, working with a third-party logistics firm helps you allocate and focus your resources on your most important tasks. Rather than analyzing distribution routes and deciphering customs rules, you can focus your energy on more important items, like improving your product or gaining new market share.
When you partner with a third party, they should be able to seamlessly take over the global distribution duties. And since they have experience performing this function for hundreds of other companies, they can quickly analyze and implement the most efficient ways to get your products where they need to be.
2. You maximize your usage of space.
Your facility may be one of your costliest resources. To maximize profits, you have to use every square inch of your facility effectively. If you’re dedicating a substantial amount of your facility to things like packaging and warehousing, that’s space that can’t be used for production or other profitable activities.
You can transfer those functions to the global hub warehouse, freeing up space in your own facility. That may allow you to expand your production, consolidate facilities and processes, or even rent the space out to generate some extra cash flow.
Better yet, if you partner with a third party, they’ll likely already have warehousing space available. You simply pay for the amount of space you need. No more, no less. You can grow your warehousing capabilities with your business without investing substantial capital.
3. Gain full transparency and control.
Perhaps the biggest challenge with managing global distribution in-house is that you may not have the software or other transparency tools you need to make informed decisions. Is your route the most cost effective? Is the package exposed to damage or elements while in transit? Was the package opened at customs? Are you on track to meet deadlines?
There are plenty of tools and software that can help you answer all of these questions. Let’s face it, though. If you’re going to invest considerable capital into technology, would it be to improve your product and process or manage your distribution? Right.
When you work with a third party, you don’t give up control. Rather, you take back control.
The great thing about working with a third-party logistics partner is that they’ll have the technology ready for you to use, without any capital investment on your part. They can install GPS into your package to track exposure, risk, and location. They’ll scan the containers as they enter and leave each facility, so you can get real-time updates with just a few clicks.
When you work with a third party, you don’t give up control. Rather, you take back control. They give you the tools and data you need to make smart decisions about your logistics and distribution. And they free up capital so you can invest it in your products and processes.
The globe has shrunk and will continue to shrink going forward. Your global distribution efforts are likely to become an increasingly important part of your business. Take steps now to regain control of those efforts so you can maximize efficiency and profitability. Consider a global warehousing hub, run by a third party, for your global efforts.