Choosing the right logistics partner can have a significant impact on how efficiently a business receives, stores, manages, and distributes its products. For businesses operating in Southern California, partnering with a third party logistics company Fontana can provide warehousing, inventory management, transportation coordination, fulfillment, and distribution capabilities, without the business having to manage every logistics function internally.
Why Logistics Partner Selection Matters
Logistics is closely tied to almost every aspect of a product-based business.
Products need to reach the correct facility, arrive in the correct manner, be received, maintained in inventory, and then be sent to the correct customers or other facilities.
Poorly managed logistics can result in:
- Inventory discrepancies
- Delayed shipments
- Order processing issues
- Higher transportation costs
- Limited warehouse capacity
- Poor visibility
- Inability to manage growth
A suitable logistics partner can assist a business in building processes that are more organized and scalable.
However, businesses should carefully assess potential providers, instead of simply selecting one provider based on a lower price.
Location and Transportation Access
One of the first considerations that a business should keep in mind is the location.
Warehousing that is near transportation hubs can help facilitate moving products from ports, warehouses, or distribution centers to customers.
Fontana is part of the Inland Empire logistics market, and provides access to key Southern California transportation infrastructure.
For businesses that are importing products through Southern California ports, the relationship between a port, warehouse, and transportation has special importance.
A strategic location can help businesses with inbound inventory as well as distribution requirements.
Evaluating Warehouse Capacity
Another major consideration that businesses must make is related to warehouse capacity.
Businesses should consider whether a logistics provider can accommodate the inventory requirements that a business has, including any expected future growth.
A warehouse’s capacity involves more than the square footage.
In fact, businesses should ask about:
- Receiving dock capacity
- Shipping dock capacity
- Storage configuration
- Yard space
- Product handling capabilities
- Labor availability
- Seasonal capacity
A provider should be able to explain how it manages periods of higher demand.
For example, seasonal businesses may have substantially more storage and outbound requirements during certain times of the year.
Inventory Management
Inventory plays a critical role in the success of logistics.
Businesses need to be able to track product quantities and know where products are located.
Having an effective inventory management system in place can help a business to track:
- Products received
- Products stored
- Products allocated
- Products shipped
- Inventory movements
- Returns
- Damaged or unavailable products
Technology can be especially helpful here, as it can provide visibility into activity within a warehouse in real-time.
Businesses can utilize this information to make informed decisions about buying, replenishment, fulfillment, and distribution.
Technology and System Integration
The modern logistics environment is increasingly reliant on technology.
A logistics provider may utilize warehouse management systems, transportation management systems, electronic data exchange, APIs, and other technology to tie into a business’s own systems.
The right technology can help businesses achieve a more seamless experience with greater visibility into:
- Order tracking
- Inventory
- Shipment tracking
- Reporting
- Data exchange
- Retail compliance
- Operational communication
For businesses that have multiple retailers or use multiple sales channels for distribution, technology capabilities are even more crucial.
The provider should be able to explain what systems it has in place, and how data can transfer from a business’s systems to the logistics operation.
Warehousing and Distribution
Warehousing and distribution go hand-in-hand.
While a warehouse serves as a place to maintain inventory, it can also serve as a distribution center, with products being received, sorted, picked, packed, organized, and shipped out.
Businesses should keep this in mind when considering warehousing and distribution services.
An integrated approach to managing inventory between a warehouse and transportation can help connect a business’s inventory needs with the requirements of its customers.
Scalability
A business’s growth can take a turn that can surprise many.
A company may have a relatively small inventory volume, then expand into new markets, add retail accounts, launch new products or increase its order volumes, among other scenarios.
A logistics provider must be able to accommodate the changing needs of a business.
Businesses should consider asking:
- Can warehouse capacity increase as needed?
- Can new products be added?
- Can order volumes increase?
- Can new customers or retailers be added?
- Can value-added services be utilized?
- Can transportation be adjusted?
Scalability is crucial to businesses that are experiencing high volume or seasonal increases in demand.
Communication and Customer Service
While the technology and infrastructure of a logistics provider are crucial, businesses must also keep in mind how the provider communicates.
Businesses need to know how their logistics partner handles questions, exceptions, inventory issues, shipment delays, and other operational matters.
Before finalizing an agreement, businesses should understand:
- Who their primary contacts are
- How frequently reporting is done
- How urgent concerns are escalated
- How inventory discrepancies are handled
- How performance is communicated
Clear communication can help ensure that issues are quickly identified and resolved.
Understanding Logistics Costs
Price should be considered based on the overall costs that a business is incurring.
Logistics pricing can consist of a number of components including:
- Storage
- Receiving
- Picking
- Packing
- Pallet handling
- Shipping preparation
- Special handling
- Returns
- Value-added services
Businesses should request an explanation of a logistics provider’s pricing structure.
In addition, businesses should keep in mind any potential additional charges prior to signing an agreement.
Comparing costs between providers based on a simple storage or handling rate can be misleading, as a complete logistics operation consists of a number of components.
Security and Compliance
Businesses should keep in mind the security and compliance aspect of inventory.
Depending on the products and industry, there may be specific requirements for warehouse facilities, including security, quality, regulatory, or handling procedures.
Some considerations may include:
- Facility security
- Video surveillance
- Access controls
- Inventory controls
- Quality procedures
- Industry certifications
- Product-specific requirements
The requirements that are needed will vary based on the products that are being stored, as well as the requirements of a customer.
Questions to Ask a Logistics Provider
Prior to selecting a logistics provider, businesses should prepare a list of questions.
Some questions to consider include:
- Where are your facilities located?
- How much warehouse capacity is available?
- How do you manage inventory?
- Which technology systems do you use?
- Can you integrate with our systems?
- How do you handle higher seasonal volume?
- What transportation services are available?
- How are inventory discrepancies handled?
- What reporting is available?
- How is pricing calculated?
The answers can help businesses to understand whether a provider can meet their operational requirements.
Common Questions
Why is warehouse location important?
Warehouse location can affect transport distances, access to major routes, delivery times, and overall costs.
What should businesses look for in a logistics provider?
Businesses should evaluate location, capacity, technology, inventory management, transportation, scalability, communication, security, and pricing.
Can a logistics provider support business growth?
A provider that has scalable facilities, systems, and processes can help a business as its inventory volume and order demands increase.
Why is technology important in logistics?
Technology can help with warehouse inventory visibility, order management, reporting, communication, and system integration.
Should businesses choose a logistics provider based on price?
No. Businesses should evaluate total costs of a logistics service, as well as other factors including technology capabilities, capacity, reliability, and the operational requirements of a business.
Final Thoughts
Choosing a logistics partner is a vital decision for businesses that rely on reliable inventory movement and delivery to customers.
The right provider should go beyond mere warehouse space.
Businesses should consider the entire logistics operation, including the location, warehouse capacity, inventory management, technology, transportation, distribution, communication, scalability, and pricing.
A thorough evaluation can help a business ensure that it has selected a logistics provider that is able to meet the needs of the current operation as well as support it in the future.
Contact Bee Imagine to discuss logistics, warehousing, inventory management, fulfillment, and distribution solutions for your business in Fontana and throughout Southern California.
