Distribution Logistics

Why 3PL Logistics?

B2B Editor10 February 2015

With accelerating technology and global social media connections, business operators have become increasingly aware that further growth, economic and competitive advantage can be expanded by engaging a 3PL partner to support and enhance Supply Chain solutions.

What is 3PL?

A third-party logistics (3PL) provider is a specialist who can provide you with professional logistics services for part or all of your supply chain management functions (from point of manufacture through to delivery to your end customer).

What benefits can a 3PL Provider deliver?

* Flexibility for growth and manage risk to cover unexpected events (staff leave/sickness; seasonal sales fluctuations; ad hoc events) and minimise your fixed overheads;

* Optimal purchasing and inventory strategies to meet demand, reduce excess and limit stock outs;

* Access to skilled logistics professionals, fulfilment machinery, established warehouse facilities and integrated systems;

* Enhanced customer service capabilities and diverse service offerings (personalised branding opportunities);

* Improved distribution options through exposure to a broader transit network and access to lower prices through economies of scale; and * Frees your time to concentrate on selling, marketing and growing your business.

Key points when considering outsourcing to a 3PL Provider?

* Are my own facilities and resources able to cope with volumes as they increase?

* Do I have enough time to do everything – do I want to do everything?

* Will I retain visibility and control of my business if I outsource?

* Does the 3PL provider offer flexibility and personal service (responsive to abnormal situations; prepared to discuss variations; able to adapt to changing business directions)?

* What systems are in place and can they be integrated with my business (not the other way around)?

* Can they prove capacity and capability in the industry (testimonials and references)?

* Experience – do they understand my product/market and care about my business?

* Can they give me independent and objective advice?

* Are the defined operating costs easily understood, outlining both Fixed and Variable costs according to the business needs?

With cost a critical component of any business, ask yourself, does the 3PL provider offer a value service or just the “cheapest” price? In conjunction with analysis of the product life cycle and consumer demands, thorough Supply Chain delivery, pricing and service levels are formed.