Third-party logistics, also known as 3PL, is essentially advice from an outside source about business management. Often, when you own a business, your heart and soul is invested in its success. This emotional investment can sometimes cloud your judgement, and your management might be negatively affected. For example, if there is an avenue of your company that is not necessarily cost-efficient but is the way you’ve been doing it for ages, you’ll probably be unlikely to change your ways simply because of the way you feel about it. For this reason, third-party logistics providers exist.
Third-party logistics providers give companies an outsourced opinion about their business management. Namely, such providers focus on supply chains and evaluate how these companies warehouse their goods, transport their products, operate their business, and adapt to the market. These evaluations are focused on getting the business to run more efficiently and save money in all areas of operation. If you are looking to make your company more efficient and save money along the way, you should consider hiring a third-party logistics provider. Before doing so, first consider the different types that exist.
A standard third-party logistics provider will focus on the basics of business logistics. Their evaluations will include supply chain management, warehousing options and product distribution methods. This type of 3PL offering is designed for businesses that want a more general improvement based on third-party opinions.
Third-party logistics providers that focus on service offer more unique options for their clients. If you choose this type of 3PL provider, you will likely be offered a tracking and tracing service. This option allows you to see exactly where your products are ending up, and how fast. With this information, you make improvements based on performance. Additionally, they can offer better security options, IT services and packaging services. And, since it is a third-party service, their opinion will be removed from the company’s actual success.
This type of third-part logistics works best for small companies. They essentially take over all of the company’s logistics operations to improve them dramatically. Instead of simply giving advice about operations, the 3PL provider in this category will actually implement the changes on their own. The do not develop a new service, but instead improve the existing company’s operations.
This is the most involved type of third-party logistics provider. If you choose this service, you will hand over complete control of your company to the provider. With a third-party perspective, the provider will take over the logistics functions and develop an entirely new operation for them. If, for example, you have an existing production company in Sydney, you could hire a developer 3PL service to completely upheave your existing system. This option leaves you with entirely new logistics operations when all is said and done.
The key to 3PL providers is that they are completely removed from the success of your business, and an outsider’s opinion is simply invaluable for making major decisions.