Standardizing with 3PLs: How to Achieve the Lowest TCO in 3PL-Managed Networks
In today’s volatile and ever-evolving supply chain landscape, manufacturers are under growing pressure to balance agility with efficiency. Labor shortages, rising transportation and warehousing costs, geopolitical disruptions, and growing e-commerce expectations have all converged to stretch traditional in-house logistics models to the breaking point. As a result, more manufacturers are turning to third-party logistics providers (3PLs) not just as outsourcing partners—but as strategic enablers of scalable, standardized, and cost-effective distribution networks.
At the same time, the increasing availability of cloud-based warehouse management systems (WMS) and advanced systems integration capabilities are enabling manufacturers to take a more centralized approach to supply chain control, even when working across a decentralized network of 3PLs. When executed strategically, this hybrid model—leveraging 3PL agility while maintaining centralized WMS ownership—can unlock the lowest possible total cost of ownership (TCO) while also enabling rapid scale, operational excellence, and continuous improvement.
Below, we outline key strategies for standardizing with 3PLs to achieve a lowest-TCO environment, backed by best practices in WMS deployment, governance, and performance measurement.
Why 3PLs, Why Now?
The case for leveraging 3PLs has never been stronger:
Labor Constraints: The persistent shortage of skilled labor is making it increasingly difficult to staff and operate in-house distribution centers. 3PLs bring trained labor pools and staffing flexibility.
Speed to Scale: As companies navigate M&A activity or spin up new operations to meet customer demands, 3PLs offer plug-and-play solutions with pre-built infrastructure and system templates.
Focus on Core Competencies: Outsourcing warehousing allows manufacturers to focus capital and talent on product innovation and customer experience instead of operations management.
Technology Gaps: As cloud-based and SaaS solutions become the norm, manufacturers can decouple technology from physical operations—owning the system design while outsourcing execution to 3PL partners.
Keys to Achieving Lowest TCO with 3PLs
Limit the Number of Strategic Partners
Rather than deploying across multiple regional 3PLs, consider working with 1–2 strategic providers who offer repeatable onboarding processes and scalable operational models. This reduces the need for redundant systems design and integration work and simplifies governance.
Embrace a Centralized WMS Strategy
Take ownership of your WMS architecture while allowing 3PLs to operate on your centrally deployed platform. Standardized configuration, training, and support toolkits can make onboarding new 3PLs fast and low-risk. A single-source system enables visibility across all warehouses, regardless of who operates them.
Use Cloud to Your Advantage
Cloud and Managed Services models create a powerful three-party dynamic: the manufacturer owns the process, the software provider maintains the platform, and the 3PL executes operations. This model reduces IT overhead, improves uptime, and simplifies scalability.
Design for Flexibility and Agility
Leading 3PLs can implement scalable, industry-specific process templates that grow with your business. A centralized approach enables rapid rollouts of regulatory updates, new customer requirements, and operational improvements across the entire network.
Measure Performance and Drive Continuous Improvement
Implement a unified analytics layer across your WMS to identify underperforming sites, shifts, or providers. Encourage Kaizen initiatives by collaborating with 3PLs and rewarding innovation through gainsharing and cost-plus models. Establish a governance council that brings 3PLs into the process of improving global standards.
Plan for M&A and Growth
Standardized systems and processes make it easier to integrate new business units and align operations quickly. Flexibility in 3PL relationships is preserved, allowing you to pivot without costly system migrations.
The Financial Upside
Whether you own the WMS licenses or fund them via your 3PLs, centralized ownership results in:
Lower IT costs by consolidating software spend and reducing the need for disparate system support
Higher operational efficiency through best-practice process design
Greater leverage in 3PL negotiations through standardized bidding and performance benchmarking
Better service levels and inventory accuracy, leading to improved customer satisfaction and revenue growth
Final Thoughts
With the right architecture, governance, and 3PL partnerships, manufacturers can achieve the best of both worlds: outsourced flexibility and centralized control. This approach not only reduces total cost of ownership, but also future-proofs your supply chain for growth, complexity, and disruption.
At SCT, we help manufacturers design and implement scalable warehouse programs that standardize operations across 3PL partners, reduce IT complexity, and drive measurable value. If you’re ready to evaluate or evolve your 3PL strategy, contact us to learn how we can help you build a best-in-class warehousing model with the lowest TCO in the industry.
Learn more about how SCT can help you maximize the value of your 3PL relationships and WMS investments. Let’s talk.
