When a company outsources supply chain management functions to a third party logistic (3PL), it enjoys a number of benefits. Third party logistics provide an all-inclusive solution in assembling, packaging, storage and distribution. Through the use of 3PL, businesses can therefore benefit from a dependable advantage of logistics and also maximize their profitability through combined resources and knowledge.
The following are some of the roles and functions generally offered by 3PLs to their clients in the supply chain.
1. Resource Network
3PLs have got a wide available network of resources that offers many benefits compared to in-house supply chains. Using the resource network of 3Pl’s ensures that every step in the supply chain is executed in an efficient and cost effective manner. Through the use of 3PLs, it is possible to leverage volume discounts and relationships which can result to reduced overheads and fast delivery of services. As such, a 3PL provider enables your company to benefit from resources that are not available in-house.
2. Saving Time & Capital
When logistics are outsourced, the company greatly saves on money and time. A 3PL provider saves the company the need of investing in warehouse storage space, technological enhancements, transportation and the labor to carry out the logistic processes. 3 PLs also save the company costly mistakes hence enabling the business to build an international network of logistics with high returns and low risks.
The time required to carry out the supply chain is also minimized. The company therefore does not get alarmed about billing, paperwork, training, auditing, staffing and optimization required in order to get your supplies where and when they are expected to be delivered.
3PLs are quite knowledgeable on industrial best practices as they are always updated with the most recent technological developments. Their software is proficient in advanced reporting, management of inventory and provision of visibility in monitoring the whole process. In order to ensure that only the right quantity of inventory is procured when required, 3PL experts make use of Just in Time principle.
When the company outsources the logistics function, the experts take over the work leaving the company to focus on its core competencies. Therefore, the company can enjoy a peace of mind while its logistics are handled by seasoned and reliable professionals.
4. Flexibility & Scaling
3PL experts are able to scale labor, space and transportation in accordance to the inventory requirements. As such, businesses that have seasonal periods can therefore benefit from transitions that are stress free in moments of industrial highs and lows by utilizing more resources and spaces only when necessary.
Using the services of 3PL helps the business to expand to new regions without any limit. Providers of 3PL services often have warehouses and distribution centers located strategically to enable swift shipment of goods to any destination across the globe. Decentralized distribution enables low costs and offers quick delivery times. Therefore 3PLs provides resources that can effortlessly support new markets growth.
5. Constant Optimization
3PL providers have resources to make improvements and adjustments to every supply chain link. 3PL professionals ensures that your needs are met by the fastest, cost effective and efficient methods. They have tools of restructuring the supply chain and technology that ensures that the right quantities of goods are delivered as and when needed. Advanced software management eliminates inefficiencies by ensuring that the supply chain is streamlined.
Outsourcing 3PL services ensures that the logistics processes are continually improved. Providers of 3PLs help in reducing wait times, enhancing profit maximization and customer service improvement.