Automotive retailers have historically relied on brick-and-mortar stores due to the operational challenges of warehouse fulfillment for bulky, oversized, or heavy products. However, the automotive market is well-suited for online shopping, offering buyers access to rare parts for various makes and models. 3PL service providers can significantly aid automotive sellers by offering specialized 3PL warehousing and expert fulfillment services for consumers.
The role of 3PL in the automotive supply chain involves inventory management, transportation and distribution leading to cost reduction, and compliance. Moreover, this blog outlines five ways a 3PL assists automotive sellers.
What is an automotive 3pl?
An automotive 3PL is equipped to handle a wide range of auto parts, offering comprehensive logistics services for full-service automotive sellers. This includes 3PL warehousing capabilities to store and ship oversized merchandise such as fenders, tires, seats, and complete engines.
Some of the globally recognized 3PL leaders in the automotive industry include DHL supply chain and XPO logistics, which have served as the top innovative logistics solutions in the automotive market with a strong market presence.
At MacMillan SCG we excel in shipping heavy and bulky products. Our 3PL warehousing services include extra-wide aisles to accommodate large boxes and robust conveyor belts designed to handle heavy items efficiently.
What is the role of 3pl in automotive supply chain?
The automotive supply chain is a complex network requiring precision, efficiency, and adaptability. Third-party logistics (3PL) providers play a crucial role in this area, from optimized 3PL warehousing to efficient order fulfillment and delivery to designated area. The demand for automotive fulfillment is only getting bigger in today’s market dynamics, with the growth of online and onsite sales.
This blog delves into how 3PLs enhance the automotive supply chain, from inventory management, warehousing, order fulfillment to cost reduction and technology integration for improved customer satisfaction.
- Enhancing inventory management: In the automotive industry, managing inventory efficiently is essential due to the vast range of parts and components, each with varying demand cycles. MacMillan as a 3pl service provider utilizes advanced inventory management systems (IMS) to track parts in real time, minimizing the risk of stockouts and overstock situations. This real-time visibility allows companies to maintain optimized inventory levels, ensuring that critical components are always available when needed.
- Streamlining transportation and distribution: Given the need to move heavy and bulky items like engines and transmissions. 3PLs offer specialized transportation solutions tailored to the automotive sector, including multimodal transport options. MacMillan SCG allows a geographic coverage in the Greater Toronto Area and 80% of western region coverage allowing warehousing Toronto and to help your business align networking.
- Reducing operational costs: By outsourcing logistics to 3PL service providers, automotive companies can significantly reduce their operational costs. 3PLs leverage economies of scale, enabling them to offer competitive pricing for warehousing, transportation, and other logistics services.
- Ensuring compliance and risk management: Compliance with industry regulations and standards is paramount in the automotive sector. 3pl services providers implement robust risk management practices to mitigate potential disruptions in the supply chain, including contingency planning and disaster recovery strategies.
5 ways a 3pl help automotive sellers
Expert fulfillment is essential for business growth, especially for automotive sellers dealing with bulky and fragile auto parts. Here are five ways a 3pl service provider can help an automotive sellers thrive in today’s dynamic market.
Inventory management and safe storage:
Selling auto parts can be an inventory management challenge. With numerous parts to store, each requiring the correct version for different models, you might need to organize and secure thousands of SKUs, ready for shipment. This is where professional warehousing comes in. Logistics companies such as MacMillan SCG utilizes warehouse management systems (WMS) to track SKUs from inbound shipment through order fulfillment and shipping with a 24/7 security protocol to keep your inventory safe and tracked.
Kitting:
Kitting involves pre-packing items to ship together, a strategy automotive sellers use to prepare SKUs that usually sell as a group. For example, a customer ordering a steering column for a 1999 Ford Mustang might also need related parts to accompany such as a steering wheel. By using kitting, you can pre-assemble all the necessary components for rebuilding a power steering system into one convenient package.
Kitting also facilitates package consolidation, saving on shipping costs. By packing small items with larger products that ship based on dimensional weight.
Kitting streamlines the pick and pack process, as a picker can retrieve a single pre-assembled kit instead of multiple individual SKUs to fill an order. Assembly lines are set up to efficiently create kits ready for shipping, and the kitting process can include standard operating procedures (SOPs) to ensure each set is packed safely.
Pick, Pack and Ship:
An automotive 3PL service provider specializes in timely and complete order shipments. Their warehouse management system (WMS) generates efficient pick lists for warehouse staff. Technologies like RFID tags and barcoding ensure accuracy in item selection. Additionally, experienced packers use the appropriate materials and operational methodologies to pack each order professionally, ensuring it arrives in perfect condition.
- Cross docking: is labeling orders on the inbound dock and moving them to shipping instead of placing stock into inventory first. Cross-docking is an excellent method to allow order fulfillment and lower storage costs. When evaluating potential 3PL service providers, inquire if they offer cross-docking to enhance the speed of your order processing.
Returns management:
Return processing in automotive 3PL refers to the management of product returns within the automotive supply chain by 3PLs. Although high-quality automotive logistics can minimize your return rate. Thus, having reverse logistics solutions in place is still crucial. Handling returns like engine blocks or transmissions can be a challenge, partnering with a 3PL can assist you in overcoming these obstacles.
Return processing in the automotive 3PL includes several key steps such as:
- Receiving
- Storing
- Inspection and evaluation
- Inventory update
- Disposition
- Reporting
Scalability and shipping discounts:
Shipping automotive parts, mainly the heavy or oversized ones, can incur significant expenses. Carriers often impose surcharges for packages exceeding certain weight limits, such as 70-150 pounds. Additionally, oversized boxes may be subject to dimensional weight pricing, further increasing shipping costs.
Maintaining low shipping costs is crucial for 3PL warehousing and fulfillment success, and partnering with a 3PL can aid in achieving this goal.
For instance, MacMillan SCG offers competitive rates as compared to industry benchmarks and other logistic carriers, including improved dimensional weight factors. As a result, we can offer shipping discounts to increase scalability, making it more cost-effective to ship automotive parts with value added services beyond basic transportation and warehousing.
Understanding the logistics of oversized merchandise
Many 3PL warehouses will claim bulky automotive parts shipment, but you need a 3PL services provider with experience in oversized shipping to provide quality automotive logistics.
Here are the key solutions you will find with an automotive 3PL services provider:
- Safe handling of big and bulky products: Warehouses experienced in handling bulky inventory implement processes to safely move and store heavy merchandise. This includes palletizing for forklift transport, maintaining extra-wide aisles for large boxes, and using two-person lifting procedures for heavy items. These measures taken by your 3PL service provider ensure your products are protected from warehouse damage. For further details on pallet positioning, late mile deliveries and heavy inventory tracking get in touch with us!
- Packaging: Higher volume orders and heavy product parts require specific packaging, partnering with a 3PL service provider focuses on accurate packaging even if it is a small spark plug to big engine parts in order avoid damage rates and customer satisfaction.
- Accurate transportation services: Certain items are shipped via residential freight rather than FedEx or UPS. An automotive 3PL warehouse will have established relationships with freight services to deliver even the heavy auto parts efficiently.
How can MacMillan help automotive retailers thrive?
MacMillan SCG is a top tier provider for oversized fulfillment, offering guarantees that eliminate concerns about inventory shrinkage, late deliveries, or incorrect orders. We are offering highest order accuracy rates as much as 99% and on time delivery metrices with proven track record of reliability and responsiveness.
If you’re looking to enhance your automotive parts supply chain management, you need the best 3PL services provider in Canada.
Key takeaways
The role of automotive 3PL services provider is paramount in optimizing supply chain operations for automotive sellers. With expertise in managing a wide array of auto parts, 3PL providers like MacMillan SCG offer comprehensive logistics solutions. By leveraging advanced technologies and specialized services such as kitting, pick-pack-ship, and returns management, automotive 3PLs streamline operations, reduce costs, and ensure compliance with industry standards.
