3PL is not just for big businesses with large budgets. It is also often a cost effective solution to smaller businesses looking to scale and optimise their business. Want to know if it is the right option for your business? Read on.
When done right, 3PL services can be cost effective. Think for example about gift pack assembly during events like Christmas. Among other things, a 3PL service will eliminate your concerns about getting a temporary warehouse space, security, infrastructure and quality control processes in place.
Are your infrastructure and systems up to date and reliable? Are you focussing too much energy on logistics and not enough on sales and building brands? Do you need more effective quality control processes? Are the costs for running your logistics getting out of control? If any of these worries sound familiar to you, your company probably needs 3PL services. Benefits of using a warehouse management system.
Costs – Avoid partners that charge fixed costs for basics like warehouse space and staff. Whilst this gives you certainty on what costs would be each month, you won’t benefit from quiet times and you will be charged even when you are not using all the space. What is a fair way of calculating warehouse fees?
Safety – Ensure they have facilities to keep your products safe. Do they have effective security, health and safety processes in place? This is particularly important for higher value and sensitive products.
Systems – There is no excuse for a third party logistics company not to make use of the latest technology to drive processes. Without proper systems in place, delays and errors are inevitable.
Initiative – The ideal partner is proactive. They look after your interests and bring efficiency to your business. They work on more than what they have necessarily been tasked with.
There are hundreds of 3PL partners out there. It is all about finding one that works for you.
In this digital-obsessed world, marketers can very easily become caught up in the power of marketing through our screens – while forgetting that more traditional marketing still has many benefits. The truth is that by combining the power of both digital and traditional above-the-line (ATL) and below-the-line (BTL) marketing methods, you can create campaigns which have optimum impact. A good example of this is with the recent launch of Budweiser by Anheuser-Busch InBev.
This launch was a 360-degree marketing initiative, and Nexus Fulfillment was chosen to be the key BTL marketing partner for AB InBev, as the in-store launch was a critical component of the launch campaign in general. This was because of the product in question: in a liquor store, in-store marketing materials have been proven to have great influence over a consumer’s purchasing decisions.
Robbie Fern, Marketing and Sales Manager at Nexus, explains: “In South Africa, online sales are still low at less than 5% of ALL retail sales. For most South Africans, purchasing still takes place face-to-face, in a bricks and mortar space, where good in-store marketing can work its power”.
Robbie points out a worldwide trend where people tend to do their pricing research online before making a considered purchasing decision offline, in a physical store. Because of this, it’s clear that in the right circumstances, BTL marketing is still a very worthwhile investment. After all, a good in-store promotion can quite easily overturn a decision made at your computer.
Some products, like electronics, are more commonly purchased online and so can take advantage of digital marketing benefits, like real-time metrics and lower marketing costs. Other products however, are targeted at customers in a lower Living Standards Measure (LSM) segment – where online research, and digital use in general, is far less likely.
For products like these, marketing campaigns do well to include in-store BTL marketing efforts, due to the target market’s limited connectivity, as well as their purchasing habits. Here you swap the digital marketing pros for others such as being able to appeal to local tastes, provide enduring (and more easily remembered) marketing material, as well as bringing in the persuasive powers of personal, human contact.
For Anheuser-Busch InBev’s launch of Budweiser, we delivered almost 600 000 product units to retailers around the country. We’re proud to say that the products were delivered on time, with 100% accuracy to their final destinations, and that the launch was considered a major success by the client.
When Below-the-Line Marketing Campaigns Go Wrong
One of the most common pitfalls when you’re running a below-the-line (BTL) marketing campaign is when the kit – the promotional or point-of-sale items – lands too late in a retail space, goes to the wrong retail space or doesn’t arrive at all. If this happens, the ramifications can be broad:
For the customer
Commercial impact to you
What does this all mean in the context of what Nexus does? According to Robbie Ferns, our Sales & Marketing Manager: “It’s simple – we have a kit accuracy for our clients of 99.87% and delivery on time of over 99%. This means that by using us, you’ll significantly reduce the risk of having to deal with these kinds of problems”.
How do Nexus make sure your below-the-line campaigns run seamlessly?
Every individual and business in South Africa owes a large amount to Nelson Mandela’s legacy, and we fully support the 67 Minutes campaign on Nelson Mandela Day, and the idea of using this opportunity to do good. There are so many organisations that need support but this year we focused on these ones:
Over the last five years we’ve donated funds to the Red Cross Children’s Hospital and this year was no different. The R10 000 we donate is put into a fund that pays for surgeries to be performed on children who would otherwise have to spend months (or years) waiting for an opportunity to be operated on. This means that these kids can get back to being kids, by getting the medical attention they need to live fulfilling lives. Without these donations, the children would have to wait much longer to receive these life changing surgeries.
We believe that the 67 Minutes Campaign is a wonderful initiative but we also want to establish relationships with organisations that need our help, assisting them all year round and making a lasting impact. Yesterday the Nexus Team went out to Emasithandane, a home for orphaned and abandoned children that we work with throughout the year, and spent time with the children, giving them much needed blankets for winter, plus food hampers.
Currently they have 29 children from toddlers to late teenagers in their care. They continue to try and get social grants for these kids in order to improve their standard of living but as the facility is not large enough, they unfortunately have not been successful. They therefore operate 100% on donations from various associations and companies like ours. All these children and teens come to the home because they have no parents, families or foster homes to go to, so we really feel this is an organisation that needs our continued support.
Some of our other Nexus staff members spent their 67 Minutes with the children and caregivers at Hannah’s Place of Safety. We spent the afternoon playing with the kids and giving the team there some much needed TLC with a special cake we’d arranged.
Ultimately, this day gave us an opportunity to remind us that every single person has the ability to change the world. And we have the great man Nelson Mandela to thank for that.
In a typical logistics profit and loss account, warehousing rental is one of the top monthly expenses you’ll see. For this reason, ensuring you have the right sized warehouse in the correct location can be one of the most important and complicated decisions for a company.
If you choose a warehouse simply based on current capacity, you’re likely to hinder your future growth potential. On the other hand, having too much unused space is a waste of cash. Because of these complex considerations, most companies outsource their warehousing and distribution functions to third party experts.
There’s the theory that your products plus other customers’ products should result in you paying less for the warehouse storage space you need. So does the method by which you are being charged for this space really benefit you?
Some practical examples of the benefits and downsides of these three models:
Paying a dedicated rate per month for your warehouse means you’re almost guaranteed to pay for space you’re not using. For example, let’s say you’re paying for 300 square meters of racking space. If your actual products only take up racking for 200 square meters, you’ll still be paying for 100 square meters that would be empty and unused. We also know this because any provider that charges rates in this way would never allow the client to use more than the space they are paying for. They would want to ensure a maximum revenue is achieved for available space, so it would be a key metric they’d check. There would also have to be serious considerations taken when expanding space is required.
The benefit of this method is that it is predictable. Expensive, but predictable.
On the surface, this may seem a fair way to charge. You have to remember that you’ll always be at the mercy of the third-party provider in making sure they’re using space and pallet locations as efficiently as possible. This would be difficult to manage and therefore hard to know for sure whether you’re being charged fairly. Some suppliers’ policy is to have one product per pallet location. This could be a massive downside to you, especially if you only have a few units on hand taking up very little space on a pallet.
The benefit of this method versus the first one is that theoretically you wouldn’t be paying for empty locations in the warehouse. However, you’d definitely be paying for partially utilised space.
With this method, billing is simple in that you pay a single fee for all services including the warehousing. However, it can be difficult to understand how the bill is calculated. It’s also hard to know if you are paying a fair rate for the warehouse spacing that you are really using. This lack of visibility could cost more than you should be paying – after all, as the saying goes, there’s no such thing as a free lunch.
Keeping this in mind, we approach the calculation of warehouse fees differently. We do it using a very simple methodology, but one that we know will always be in our clients’ favour. It goes as follows:
In other words, we charge you a rate per cubic metre per day for the products that you have in stock on that day. This means we don’t charge per cubic metre of the location – rather for the products taking up space. The exact calculation is therefore:
There are lots of benefits to charging in this way:
Our calculation method makes our clients happy. However, it’s also inherent to the way we approach business. As our Managing Director Greg Kruger puts it, “We always work in our clients’ best interest, as this is core to the values of our business.”
Huge news for local beer drinkers: Budweiser, one of the world’s most iconic beers, has just arrived in South Africa – and we helped make its launch a success!
Anheuser-Busch InBev (AB InBev) Africa is responsible for the Budweiser launch locally, having already launched Stella Artois and Corona in the country in 2017. AB InBev merged with SABMiller in October 2016, in a R1,3 trillion deal that was described by some as the third largest acquisition in history. Budweiser is considered to be one of the most valuable brands in the world, with distribution in 73 different countries. In South Africa, it is now brewed at SAB’s Rosslyn Brewery just outside Pretoria.
The beer’s arrival into SA coincides with the 2018 FIFA World Cup kicking off in Russia in June, of which Budweiser is an official sponsor. Ab InBev’s global “Light Up the FIFA World Cup™” campaign saw a variety of Budweiser marketing initiatives launching in more than 50 countries around the world.
As the key below-the-line marketing partner for AB InBev, we were proud to be part of the Budweiser launch in South Africa, in time for the FIFA World Cup. In total, we delivered almost 600 000 product units across multiple categories including caps, mugs, standees and other Budweiser-branded items to retailers around the country. The key objectives that we needed to fulfil to help make the launch a success were:
We’re proud to say that we turned this around in record time, and delivered products with 100% accuracy to their final destinations. Here’s to the success of Budweiser among South African beer drinkers for many years to come – cheers!
In this world there are so few people who mean what they say, and do what they say they will. Candice Brink, Customer Services Director at Nexus, is one such person. We interviewed her to find out more about her remarkable story, as a Nexus staff member who doesn’t just give our charitable initiatives lip service, but really commits – with her heart and soul.
Q: How did you come to be involved with Hannah’s Place of Safety? (HPOS)
I help out where I can and on one occasion, I was told that the kids of HPOS needed a few items. I popped in to drop off some goods and immediately connected with the kids and the host family.
Q: Of all the organisations in South Africa, why have you chosen HPOS to be involved with?
They care for kids in a time of desperate need. Janine, the house mother, gave up her high paying job to do this full time. Her selfless love and continuous sacrifices ensure a better life for all the kids that pass through HPOS. She is my absolute hero.
Q: It sound like the work they do is amazing. What drives you to want to be involved?
The kids are there for safety reasons – all of them came to HPOS because they were abused, neglected or abandoned. What they need is love, stability and affection. Even though I cannot care for all of them on a full time basis, I feel the need to make a difference where I can. After spending so much time with the kids, I’ve learned to take nothing for granted – a simple hug could be the highlight of their day.
Q: Tell us about your bond with Ezra.
Ezra is a special child from HPOS. He came to HPOS when he was only a few weeks old, and he was the smallest baby I’d ever seen. I love all the kids but Ezra was extra special from the beginning. He was unfortunately abandoned at birth, and he came straight from the hospital.
Q: At what point did you realise that you wanted to go through the process of adopting Ezra?
My family also fell in love with him and when we heard that he needed a foster family we jumped at the opportunity. We are currently fostering him and need to foster him for two years before we can apply for adoption. I was officially named as his caregiver on 1st March 2018. He is too young to understand now, but I hope he will be as happy as we are with my decision.
Q: What are you dream and hopes for him?
I know he will be a strong successful man one day, but all I want right now is for him to feel safe, loved and completely happy.
We love stories like this, where our employees demonstrate their commitment, energy and positive will to change South Africa, for the better. Candice, as your Nexus family, we wish you and your loved ones all the very best into the future, as you build many happy memories together.
It’s been predicted that approximately 80% of Fortune 500 companies use 3PL services today and that this worldwide industry brings in an annual revenue of around $750 billion.
In today’s competitive digitally-orientated landscape, everyone wants to save time and money. Consumers expect an almost instantaneous turnaround time, right from the checkout page, all the way through to the actual physical delivery. An increasing number of ecommerce business owners are turning to 3PL service providers to create speedy, seamless online user experiences.
Third party logistics providers are solution-orientated businesses that help companies operate more effectively. They offer a variety of services that include transportation, picking and packing, warehouse storage, distribution, stock management, real-time tracking, analytics, etc.
Hundreds of years ago, products were boxed, put onto ships, and transported all over the world. Businesses ran their operations and had full control over all logistics. Today, however, this supply chain is extremely complex. The rapid growth of ecommerce and emerging consumer markets around the world has paved the way for a common technological solution.
As more and more companies operate on a global scale, so too does the demand to make use of a system that not only improves speed and reduces costs, but also reduces the risk of product damage or loss. Enter the 3PL solution. Although this sector is only around 40 years old, it continues to evolve to better meet the dynamic and complex demands of the consumer.
Just 20 years ago, business owners were happy to have their product transported and delivered.
These days, they expect instant access to data that will let them know exactly where their product is at any given moment and alternatives as to how it can be better transported in the future.
The 1980s: The trend to outsource logistics to third parties really took off in the 1980s after the Motor Carrier Act was passed. This act removed imposed controls within the trucking industry, which allowed third-party companies to offer logistics services in a more complex environment. Trucking carriers also increased from less than 20 000 in the 1980s, to around 1.2 million today.
The 1990s: As new markets appeared across the globe in the 1990s, companies of all sizes were keen to grow their product range even further. Economic developments rose in India and China, which motivated companies to move their manufacturing operation overseas. Third party service providers started offering integrated logistics services, which filled the need of managing complex, global supply chains.
The 2000s: The massive expansion of the internet in the 2000s, opened the door for 3PLs to offer “connected” supply chain solutions to global companies. Transportation, logistics, and stock management were all integrated into impressive technology platforms which allowed for true supply chain visibility. Today, 3PLs continue to expand and adapt their services to meet the demands of an ever-changing global marketplace.
The dramatic shift of the 3PL industry has been documented over the last 21 years by the Annual Third-Party Logistics Study from Capgemini Consulting, Penn State University and Penske Logistics. Researchers for this year’s report found that many 3PLs have evolved from tactical service providers to collaborative partners that take on even more accountability. Nearly all 3PLs of this report revealed that data-driven decision making is crucial to the success of future supply chain activities.
With today’s continuously changing digital landscape, it’s no wonder that more and more ecommerce companies are increasing their technology expectations, and that 3PLs are jumping to the challenge by offering smart, solution-orientated logistics services.
Having a proper technology system in place to manage day-to-day logistics in your business is important – especially if you’re selling products and not services. Depending on the size of your business, a simple system may be sufficient. However, if you’re delivering hundreds or thousands of products, simple systems are not going to cut it. Warehouse space for logistics and storage means that you will likely be needing a more complex warehouse management system. This is not just for effectively coordinating order batches and tracking products – but for keeping the entire warehouse process running like a well-oiled machine.
One of the quickest ways to lose potential customers is by not having a true reflection of your current stock levels. A WMS helps to drive routine inventory checks so that when orders are placed, there is always sufficient stock available to your customers. When your business has a system that can be depended on with an accurate history, stock levels can be cut down to efficient levels. This plays a huge role in helping the business reduce overall cash that is tied up in unnecessary stock levels.
Most warehouse management systems require users to log in with an individual account. This creates a digital trail that connects employees to each specific transaction. The goal of this is to help improve accountability and lower the risk of theft and other in-house issues. It’s also a great way to identify training opportunities in order to up-skill employees and drive better work outputs.
Writing and maintaining reports, picking tickets and packing lists can all be done electronically on a WMS. This doesn’t only improve efficiency and output, but it also reduces the impact on the environment. These systems consider picking, packing and storing processes and combinations that work most effectively for your business. They also consider the size of the warehouse you are using.
Increased accuracy in daily processes can reduce the amount of product returns significantly. A WMS helps streamline systems right from the point of order through to actual delivery. This helps to ensure a more accurate determination of product availability and realistic delivery dates.
Happy employees lead to improved productivity, which enhances the overall success of your business. When systems are running smoothly, employees are confident about accurate stock levels. They are less stressed, more enthusiastic, and feel better about their work environment.
Warehouse management systems are incredible tools for improving the overall success of your business. They can be simple for small businesses, or complex for larger operations. Some high-end systems even include routing and tracking technologies such as voice recognition and Radio Frequency Identification (RFID). It doesn’tt matter which WMS you decide on. The overall goal is the same: to provide you as business owner with as much information to effectively control the operations and movements of your product inside a warehouse.
In today’s competitive digital arena, small business owners are faced with plenty – everything from payroll and networking to staying on top of social media trends. No matter the industry, there are always two key areas that receive the most attention: the quality of the product, and the customer’s delight upon receiving it. But there’s a crucial part of the product journey missing in this equation – the in between steps. What happens between the packaging stage and the unboxing stage?
Enter logistics. Many business owners are oblivious to all the logistical elements that take place between point A and point B. These all control how fast, carefully, or cost-effectively your valuable products travel from warehouse to doorstep – and most importantly, how they influence quality and customer service.
Customers expect the same standard of delivery from any online store, whether it’s Amazon or a brand-new ecommerce business. Logistics mistakes happen – and when you’re unprepared for them, they can result in a financial whiplash and negatively affect your reputation. The good news is, they’re usually easy to spot.
Here are four common ecommerce logistics mistakes and how to avoid them:
It’s easy to assume the price of services when you’re pressed for time. This applies to everything from Saturday delivery fees and fuel expenses to outlying residential delivery costs. Prices change all the time, especially in today’s current environment. Increasing fuel prices, driver shortages that lead to higher wages, and regulatory mandates all influence logistics expenses. Make sure you understand these fees and seek out the most cost-effective way to transport your product.
As a business owner, you want to meet your customers’ expectations every day – after all, when your customer is happy, so is your bottom line. Today’s consumers are impatient and many of them expect instantaneous delivery. However, next-day deliveries or fast delivery services are not always cost effective. For example, not all areas are easily accessible which makes same-day deliveries a challenge. When you commit to only express delivery, you may need to incur higher costs. Find out what delivery methods are best for each location. You need to ensure you balance the customer’s service expectation with your finances. And remember, when customers receive the goods they want on time as promised, you’re more likely to receive positive marketing through word of mouth.
Doing things by hand is practical when your business is small enough. But the moment you start to expand, you need a more efficient system for processing orders and delivering products. This is where the art of automation comes in, specifically eFulfilment. These service providers are experts in implementing logistics solutions for ecommerce businesses. They do all the heavy lifting and provide software that’s tailored to your business – including services like picking and packing, warehouse storage, personalised branding, and delivery.
Packaging can be pricey – the process of boxing items should never be undervalued. Nobody wants to receive broken or damaged goods due to lousy packaging. Returned goods mean that you’ll probably end up paying triple the transportation costs to replace items. To ensure that your packages always get delivered in tip-top shape, hire a professional company with stringent quality processes – like an eFulfilment provider to handle the entire packaging and transportation process for you.