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Dudley Lorentzen posted an update 2 years ago
In supply chain, 3PL refers to a company’s usage of third-party companies to complete aspects of its supply, warehousing, and overall logistics services. These services are normally outsourced to save resources for the company. For instance, the production process of a certain product may be too expensive for a local manufacturer to undertake. To remedy this problem, the company may contract a third party company that specializes in making customized consumer products. This allows the manufacturer to focus on improving its own processes and production capabilities at the same time outsourcing its customer service functions to a specialized third party.
The most important advantage of outsourcing 3PL is that it reduces costs and increases flexibility. By contracting 3PL providers, manufacturers are able to reduce their overhead expenses and improve liquidity by focusing on core business activities rather than on fixed assets. Furthermore, 3PL providers usually have extensive experience in the fields in which the manufacturer operates. This enables 3PL providers to offer advice and recommendations to help streamline operations and decrease waste.
3PLs are usually engaged in warehousing and logistics operations. Warehousing refers to the transportation, storage, and disposal of inventories. In addition, warehousing also encompasses the management of stocks, the handling of materials and goods in transit, the preparation of invoices, and the collection, loading, and checkout of finished goods. Logistics refers to the process involved in transferring raw materials to manufacturers for manufacturing. Some of the services provided by logistics are transfer of freight from the manufacturer’s warehouse to distributors, payment and clearing of bills, the secure handling of goods during transit, and the transportation of finished goods to end users.
The term logistics or supply chain management can apply to any aspect of the supply chain. A manufacturer can use 3PLs to facilitate the transport of goods from the manufacturing plant through the supply chain to the customer. Alternatively, a third-party logistics provider can provide a mobile and on-site logistics provider with access to transportation, loads and locations, so they can fulfill orders as fast as possible. In addition to this, some 3PLs provide freight and trucking services.
Depending on your manufacturing needs, you may need a combination of on-site and off-site 3PL services. For instance, if you manufacture batteries, you may want to acquire the services of a third-party logistics provider that has direct access to the manufacturing facility and can process your batteries in-house. On the other hand, if you manufacture tires and wish to have them delivered to customers as quickly as possible, you may require off-site logistics services so you have the ability to deliver tires and other products to your customer’s location. If you have an internet retail outlet, you may wish to purchase your inventory and have it delivered to your customers on your behalf so you do not have to spend valuable time driving around trying to deliver your items. There are even some 3PLs that offer freight services for those clients who require the ability to have freight delivered directly to their door.
When you are considering how to hire the right 3PL or whether you should invest in on-site or off-site 3PLs, there are many factors to consider. The first factor to consider is what type of 3PL you are going to hire. Are you going to hire a 3PL that will act as a representative for your business? Will you be needing your 3PL to make sales calls or respond to online orders? Are you going to be requiring your 3PL to be available during regular business hours so you do not have to worry about having to hire extra staff or driving your vehicle around when you are not using it? These are all excellent questions to ask yourself before making any decision.
There are many 3PLs that are available for ecommerce fulfillment . However, you will want to consider the level of customer service you would like to experience. It is no longer enough to simply hire a 3PL to fulfill orders. You need to have an open line of communication with your 3PL so you can get any issues addressed quickly and efficiently. This level of customer service is likely to be very important if you are heavily relying on your 3PL to run your logistics.
You can save money by purchasing 3PLs directly from the manufacturer or third-party logistics provider. This is possible because the logistics providers do not stock the products and they only provide to the manufactures. Instead of paying for rent, building space, labor and product inventory upfront, you can pay a flat fee per order instead. If your company has high demand for fast delivery but low volume, then purchasing your 3PL directly from the manufacturer or third-party logistics provider may be the best choice for your company. However, this option can incur additional cost savings depending on your 3PL provider.