How Do Clients Benefit From Using Third Party Logistics

The work of a 3pl provider is just not limited to maintaining a huge warehouse, storing their client’s products in it and distributing it as per the specifications of the client. While these may define the concept in a broad sense, when talking of the service provided, a lot of value added services too come into the picture. 

Work done by 3pl providers

The work done by 3pl Logistics Companies in Mumbai and other places can be broadly classified into:

·         Operations: This is probably the most important function of a 3pl provider.  While some focus exclusively on certain specific segments, others fulfill multifarious roles. The operations department is thus concerned with providing easy, reliable and affordable shipping solutions in almost every sector from procurement to transportation and distribution.

o   Procurement: This helps customers to source the raw materials they would need to make a finished product or procure a finished product to sell. Thus this aspect of operations deals with product development, raw material sourcing, finished goods sourcing, manufacture scheduling etc.

o   Transportation: This deals with both inbound and outbound shipping depending on whether goods are procured from a domestic agent or overseas supplier. There are primarily three types of services associated with transportation like:

§  Domestics freight,

§  EXIM needs and

§  Overseas shipping.

o   Distribution: This aspect attains great importance today when e-commerce has become a way of life. Fulfillment of the needs of these e-commerce companies by storing goods and ensuring on-time shipping to the customers of these companies is definitely a very important aspect of 3pl logistics companies. A successful delivery for both B2B or business to business and B2C or business to consumer transactions is achieved with the help of:

§  Maintaining an inventory,

§  Packaging and kitting the product to be delivered,

§  Processing of the order placed,

§  B2B sales freight shipping,

§  B2C sales parcel shipping,

§  Returns management and

§  Forecasting of stock levels.

·         Management: Logistics functions need to be managed very minutely and extensively. In fact the whole business model depends on how well the same is managed. While traffic management is a priority with these third part logistics firm, management of the whole workflow with precision and accurateness definitely enables them to gain more clients and develop a good reputation for efficiency.

·         Strategy: This is another factor which defines the profitability of the whole operation both for the 3pl provider and for its clients. Designing the network so that the distance to be covered can be minimized thereby minimizing the delivery cost for the client and also bringing down its own operational cost, definitely needs a lot of careful planning and execution. 

·         Growth: Certain value added functions done by 3PL Companies in India also include marketing efforts and help with front-end sales for their clients. This service is of great help especially to e-commerce customers wherein third party logistics companies help extend sales reach into the concerned online market by:

o   Branding development,

o   Managing multichannel platforms,

o   Developing and managing online stores and

o   Establishing sales channels between their clients and social media websites.

These services as offered by 3pl providers not only enable their clients to  perform better and increase their profitability, they also enable them to utilize their workforce in a manner that is both realistic and practical. Thus hiring a third party logistic is definitely an extremely viable proposition for manufacturers, distributors and production firms.