Notes

Why Should You Outsource 3PL?

3PL is a term that is widely used in the supply chain management industry. It can generally be translated to "third party logistics". In a nutshell, third-party logistics relates to the use of third-parties to complete some aspects of a business's supply, shipping, and fulfillment processes. This includes the delivery of goods, the collection of finished goods, their packing, and their eventual disposition.


One area in which 3PLs are finding growing popularity is in the fulfillment industry. Companies in the fulfillment field rely on 3PL capabilities for many aspects of their operations. This includes warehousing and inventory. Warehousing is the collection and delivery of products from point A to point B. It is often the responsibility of a third party logistics provider to maintain inventories of product inventory and goods, as well as oversee its processing and shipping to customers.


The ability of a 3PL to assist with inventory management is particularly helpful in warehousing needs. When an order is received, the 3PL provider should be able to quickly create an accurate number of items in stock and then determine when they will be delivered. This is essential to ensuring that goods are available when customers try to purchase them. If an item is out of stock, it may mean that the customer will have to wait for delivery or try to purchase another item that is on hand in the warehouse. Again, this costs money to the customer.


In addition, a 3PL company is responsible for the management and oversight of the actual loading and unloading of products in the warehouse. This means that if an unexpected incident occurs, such as a truck rental going bad or equipment malfunctioning, the 3PL provider needs to be able to immediately address the situation. In many instances, a third-party logistics provider may act as an interim solution to the problem, until the right people are called in to handle the issue. A good 3PL provider should have a long history of handling these types of issues effectively. They should also have experience in handling freight transportation to and from the warehouse.


An additional benefit of using a third-party logistics provider is that they can act as a communication link between the customer and the manufacturer. If the customer needs more information about the available product choices or if they need assistance deciding which product meets their requirements more closely, the 3PL is there to help. The 3PL can advise the customer on freight rates and other associated costs, helping to provide the foundation for the customer's decision making. Similarly, if a manufacturer is having difficulty finding a specific piece of freight equipment that they need for their operation, the 3PL can often find a match.


If a manufacturer is considering hiring third-party logistics companies to help them streamline their warehousing and delivery operations, they should consider outsourcing their warehousing needs as well. The 3PL provider can provide a variety of on-demand services, such as packaging and labeling, pick and pack, shelf pricing and full-stop warehousing. They can even provide on-site, short-term warehousing options, such as overnight pick-up off-site.


When using 3PL services to fulfill orders, manufacturers are provided with the tools they need to calculate their manufacturing cost savings and to maximize the return of their investment. Instead of spending valuable time calculating employee productivity and ROI, the 3PL will already know the exact amount of material and labor needed to meet each customer's order, based on their individual order specifications and current production levels. By utilizing 3PL software, manufacturers can easily determine which materials to purchase and which to discount to reduce their manufacturing costs.


Another benefit to outsourcing 3PL services is that they provide their clients with support after-sales. Since logistics is such a business-science subject, not every company has the resources or experience to provide ongoing training and education to their employees. When a manufacturer uses 3PL providers to fulfill orders, they are able to provide their customers with expert support. In turn, this expert knowledge and guidance mean that customers receive timely product support, in addition to the satisfaction that comes with superior customer service. In today's economy, it's often impossible for even large corporations to maintain in-house logistics experts; outsourcing to 3PL providers allows companies to maintain a comprehensive logistical management system while saving money.

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