Any business that deals with shipping and logistics has considered a 3PL provider at one point, regardless of their size. 3PL services offer several benefits to the manufacturing industry, making them an invaluable part of the economy. 3PL providers are skilled professionals, who understand the ins and outs of the logistics business. Through outsourcing, small to mid-sized businesses can benefit from their specialised knowledge, keeping up with larger competitors.
In this blog, we will go over what 3PL supply chain management means and its key benefits that you must know.
A] What Does the 3PL Supply Chain Mean?
3PL (3rd party logistics) companies are specialised companies that help other businesses reach their customers faster and at a lower cost. E-commerce businesses outsource their logistic processes, including packaging, transportation, inventory management, warehousing, and delivery to 3PL providers. Outsourcing these business processes helps to ensure an efficient supply chain, while businesses can focus on core competencies.
These third parties specialise in managing logistics for various businesses. Through their years of experience and specialised infrastructure, they help e-commerce businesses identify and fill the gap in their supply chain.
B] Advantages Of 3PL Logistics
1. Reduces Cost Per Order
Most small to mid-sized companies are unable to invest in automation technologies due to budget restrictions; hence, they have to rely on traditional delivery methods. While these methods are still viable, they are not efficient. On the other hand, 3PL logistics services aggregate several businesses into a single facility, giving them room to invest in modern technologies and automation.
By leveraging these technologies, 3PL companies improve your delivery timing and cost. Additionally, they can also reduce your pre-order shipping cost by grouping orders from various suppliers. A higher volume of shipping allows them to negotiate better deals. Additionally, their connections and network also help to get better discounts, further reducing costs.
2. Less Investment Required
Logistics is not a cheap process. It requires large capital investments for transportation, warehousing, staffing, and other infrastructure. These are crucial aspects of logistics and must be paid equal attention to ensure optimal delivery. Not investing in any one of these facilities can negatively impact the efficiency of the logistics process.
3PLs can help to avoid these investments by offering quality infrastructure and resources. By outsourcing, you can get access to their infrastructure at a fraction of the cost. If you require specialised infrastructure, such as cold chain logistics, by outsourcing, you can avoid investing in temperature regulation systems and warehousing.
3. Exclusive Expertise And Experience
In today’s business environment, having the right expertise and knowledge is of utmost importance and it is one of the key benefits of third-party logistics. Third-party logistics providers have the expertise and experience to be aware of international compliances, domestic rules and regulations, transport documentation, routes, and procedures. New businesses who are looking to expand their reach or optimise their process can benefit from outsourcing.
Most 3PL supply chain managers also utilise the best practices for specific industries or products. This ensures your products reach the final destination in the best shape at the right time. Make sure to choose a 3PL supplier with considerable experience in your industry.
4. Reduce Time-To-Customer
With the introduction of concepts like one-day delivery and same-day delivery, consumers expect quick delivery to be the norm. Due to this, many small and medium businesses struggle to keep up with the large corporations that have the resources to deliver on such short notice.
Small and medium businesses can benefit from outsourcing to 3LP by leveraging their infrastructure and capabilities. 3PL fulfilment services have access to automation technology, reliable transportation, and experienced staff, which play a crucial role in reducing the time it takes to reach the final destination.
5. Improves Flexibility And Scalability
Scalability is a crucial part of every business; however, many small businesses are unable to scale as efficiently as they should due to a lack of resources at the right time. This is where 3PL’s services shine the most. 3PL helps businesses adjust to the changing demands by swiftly providing the crucial infrastructure.
When the demands go up, businesses can match the supply without needing to invest in expensive infrastructure. Due to this flexibility, when the supply goes down, businesses are not left with redundant infrastructural investments.
6. Gives You Time To Concentrate On Core Competencies
Outsourcing offers businesses the opportunity to focus on their core competencies, without diverting resources and manpower to non-critical tasks. Businesses can benefit from the latest logistic trends and technologies without diluting their internal resources.
Manufacturing companies, for example, can focus on R&D and improving productivity, ultimately improving their brand image. Meanwhile, 3PL transportation and warehousing can ensure their products reach their destination safely.
7. Risk Mitigation And Access To Resource Networks
Logistics is not a simple process; there are several unavoidable risks associated with it that can cause delays. Dealing with lost or misplaced goods, insufficient documentation, and unwavering traffic can be a severe headache. Thankfully, a professional 3PL provider will have plenty of experience dealing with such problems.
3PL companies have access to a vast resource network which helps them to find an efficient solution to deal with such unforeseen circumstances. They can optimise delivery through a wide network of interconnected routes and experienced staff.
8. Improves Customer Satisfaction
Everything we mentioned above boils down to one thing, enhancing customer satisfaction. Ensuring timely delivery, proper response, and efficient reverse logistics can all contribute to improving customer satisfaction. Offering such services can ultimately reflect positively on the brand.
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Conclusion
Partnering with a 3PL provider has several advantages for a business. It helps to reduce costs, improve efficiency, navigate through challenging situations, and more. You can focus on your core business by leveraging the technology, experience, and expertise of professional 3PL supply chain managers. Ultimately, this helps to improve customer satisfaction and brand image.
If you are looking for a reputed third-party logistics provider in India, feel free to contact us today! We are always eager to help your business grow.
