Adding Value to Your Supply Chain

Once limited to services such as shrink-wrapping, display building, and rainbow pallets, value-added capabilities now include everything from inscription and embroidery to configuring kits for e-commerce or inserting coupons or brochures in packages.

Wondering if it's time to add value to your supply chain? Duane Sizemore, senior vice president, marketing and business development with Saddle Creek Logistics Services, examines how value-added services can benefit your business.

1. Expand product offerings.

From building gift baskets to creating twin-packs, value-added services help give your customers more buying choices.

2. Get products shelf ready.

Value-added services such as price marking, tagging, and display building help to streamline the process of getting products on store shelves.

3. Enhance customization capabilities.

Personalization is one of today's hottest trends. Want to offer a choice of embroidered logos on apparel? Allow customers to choose the face plate for their cellphone? Value-added services can help you deliver.

4. Manage inventory more efficiently.

With the ability to customize products, you're able to stock fewer SKUs, thereby reducing the cost of carrying and managing inventory.

5. Reduce the number of suppliers.

By asking your existing partners to perform more value-added functions, you can reduce the number of suppliers and streamline your supply chain. Even materials such as cardboard for displays can be shipped to a third-party logistics (3PL) provider to be built and sent out with customer orders to eliminate one step in the process.

6. React faster to changing business needs.

With value-added operations close to the end customer, you can delay product configuration until the last possible minute to respond more accurately to customer demand.

7. Manage transportation costs.

The closer packaging facilities are to manufacturing operations, distribution centers, or end destinations, the more cost effectively you can transport products.

8. Control labor costs.

With automated solutions and careful review of supply chain processes, value-added services can help eliminate downtime and reduce the number of touches required in the packaging process—ultimately saving money on labor.

9. Ensure continuous improvement.

If you team up with a 3PL, they can assist with process reengineering, packaging needs assessment, component purchasing, and supplier evaluation to ensure value-added services are delivering what customers demand.

10. Find a partner.

Incorporating value-added services can be challenging. Experienced 3PLs can be valuable allies. They offer the flexibility and resources to accommodate unique requirements, seasonal fluctuations, and business growth. Many of today's 3PLs approach value-added services with a spirit of collaboration.

(Source: Inboundlogistics)