Impact of 3PL Logistics in the Business
A 3PL Logistics is such an area in the economy which is capable of handling all facets of a client’s distribution and networking activities. These include transportation services, inventory management, supply chain management, risk management services and monitoring of delivery services. Depending on the strength of the particular 3PL logistics service provider even global trade and customs compliance can also be taken care of. In today’s world when every organisation is trying to smoothen out its supply chain activities, 3PL logistics are becoming increasingly important partners and associates in the business and playing a pivotal role in improving the world economy.
Let us now witness some of the key areas where 3PL logistics services can be effective in the business arena
· Expanding business through expertise
A Logistics company is considered highly effective when it brings forth expertise in its area of operations. Their technical know-how, tools and scaling will enable a business to grow by leaps and bounds. The experience becomes more visible in situations when a business tries to enter into a new market or segment and wants its product to reach the end customers as quickly as possible. 3PL brings its extensive coverage network into play and helps such products to reach their desired location at a faster pace. Thus, partnering with a well-known logistics company is very crucial and effective.
- Reducing overhead cost
With the expansion of your business, it would be quite imperative that costs and investment will also increase. However, an effective logistics partner can provide you with the opportunity of lowering your costs. For instance, while increasing the marketing and networking aspects of your company, the logistics partner can very well deploy its employees for supervision and control rather than the organisation is compelled to increase its staffs for such activities.
The organisation can also cut short on the warehousing expenses. A 3PL logistics entity generally provides warehousing services and inventory monitoring as well. This provides a scope for the principal entity to further increase its inventory without having to worry about its safety and costs being incurred separately.
- Improved flexibility
Such an engagement with third-party logistics enables the principal entity to outsource the entire gamut of logistics activities and thereby focus on their core activities. Such an opportunity is also availed of when entering into new segments, such as e-commerce markets, as well as exploring new geographical markets.
- Enhanced customer service
Customer service is the top priority of every organisation in today’s competitive world. Such customer satisfaction can only be achieved when the customer receives its goods or services on time without much of a hassle. These logistics partners ensure that their clients are in a position to keep up with the good faith of their end customers with an accurate delivery system.
- Incorporating Technology
Such third-party logistics collaboration will always allow the principal entity to adopt the latest technology about transportation services and inventory management which would otherwise not have been possible to incorporate into the business. Gone are the days when inventory management was a paper-based activity and consumed huge time in the reconciliation process. With the adoption of new technology and assistance by the delivery logistics partner, the entity can re-visit its inventory valuation at regular intervals within a short period. This in turn enables the entity to reduce inventory holding cost and it also reduces chances of inventory wastage thereby creating a positive impact on the profitability of the company.
Thus, collaborating with a reputed 3PL company will ensure greater returns in the bucket of the company and enable it to grow even faster.