How third-party logistics can maximize supply chain performance
Written by Carolina Pirola - article sponsored by Coffee Friend
Coffee brings energy, happiness and joy to billions of people worldwide, but only a few get to know what happens between planting a seed in, say, southeastern Brazil and tasting espresso in one of London’s coffee shops. The journey is long, gritty, and complicated, but digitalization has helped companies gain some control over complex logistics in the supply chain.
Picture courtesy of Coffee Friend
UK online retailer Coffee Friend is a good example of how to handle coffee logistics in a way that benefits both the company and the consumer. Coffee Friend are known for exploring coffee cultures and bringing diversity in terms of coffee taste. “We thought that the meaning of having a great coffee at home symbolizes not only the taste itself but also the feeling of how great it is to always have coffee next to you,” says Gediminas Maziliauskis, Head of Supply at Coffee Friend. For this reason, the company focused on offering its clients exceptional services and fast delivery, and the decision was made to outsource logistics to Third-Party Logistics (3PL) providers. 3PL partners provide a wide array of supply chain management services – from inventory management to transportation, fulfillment and warehousing – and are increasingly demanded by companies as a solution to navigate and, to some extent, integrate the different logistics operations. According to Fortune Business Insights, “the global 3PL market is projected to grow from USD 976.2 billion in 2021 to USD 1,701.2 billion in 2028.”
Data exchanges bring companies closer to customers
It is said that with every change, there is always an opportunity waiting around the corner. And it was no exception for the Coffee Friend team during the global COVID-19 pandemic. They went to increase next-day order delivery to 96% after partnering up with Fulfilmentcrowd, a UK-based fulfillment provider. Such 3PL order fulfillment services are known for taking care of logistics and inventory management processes by improving quality and order delivery time. Thanks to the integration between both systems, all orders are instantly transferred to the service provider and can be picked up, packed and dispatched in no time. “Being closer to customers means everything to us. We feel that teaming up with a local fulfillment provider brought our Last Mile logistics to the next level,” describes Gediminas.
Coffee Friend now uses the technology that allows them to fully integrate solutions into the system, such as exchanging important data automatically, reducing mistakes, giving live inventory updates, and sending out order statuses. Data exchange allows Coffee Friend to quickly identify any stock-related issues and effectively manage returns, bringing value not only to the company but also to the customer. After placing an order, end customers get regular updates on their order status and a link to courier delivery tracking once the package is dispatched. At every stop, either at the distribution terminal or parcel locker, tracking provides an update about shipping status, so customers know where their parcels are at all times. All of this helps to substantially increase the speed of fulfillment on all orders and bring Coffee Friend even closer to their customers, an important part of their overall vision.
Stock picture from Canva
High-quality coffee straight from the roasters
Coffee Friend understands the uniqueness of every customer and their desire to find the perfect taste, which is why they started exploring new partnerships among local roasters. Since stocking dozens of different coffees would be complicated and detrimental to their freshness, the company decided to give dropshipping a try. Dropshipping allows companies to purchase products from third-party suppliers and ship them directly to the end consumer. By bypassing the step of warehousing inventory, this service makes businesses placeless and flexible. For Coffee Friend, this means being able to keep customers at the forefront by offering a broad range of coffee assortment from which to choose. By incorporating technological advancements in logistics to their day-to-day operations, they can “treat their customers as friends because coffee and friends make the perfect blend,” says Gediminas. Today, their platform offers a mix of well-known brands and those that many of us have never come across before.
The outcome of outsourced logistics is positive for Coffee Friend as it has allowed them to add more value to their customers. “After the changes in logistics, more and more customers started to identify us as coffee experts and view our website as a primary platform for exceptional coffee”, says Gediminas. This is true for many other companies that have jumped on the 3PL bandwagon over the last few years. And with supply chains still feeling the ripple effects of the disruptions caused by the COVID-19 pandemic, solutions such as this are sure to become more and more popular in the near future.
Carolina Pirola
Carolina Pirola is a journalist and communications specialist based in Madrid, Spain. A personal interest in sustainability led her to investigate coffee farming communities in the Canary Islands and northern Argentina, where she discovered the multitude of challenges & inequities that smallholder producers face.