123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Service >> View Article

Third Party Logistics: Many Advantages And Some Disadvantages

Profile Picture
By Author: varsha
Total Articles: 12
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

For most manufacturers, looking into warehousing and deliveries can cause a lot of hassles. Employing third-party logistics can actually help them deal with this.

Typically specializing in integrated warehousing operations and transportation management, third-party logistics help ease the work of an organization by customizing its operations to meet the organization’s demand. Thus third party logistics essentially deals with delivery fulfillment services including warehousing and distribution.

Commonly referred to as 3pl, these Third Party Logistics India also offers a lot of value added services wherein parts of an organization’s supply chain can also be integrated into the system along with other production and procurement services as and when required by the organization hiring their services.

Advantages of using 3pl

From an organizational point of view, there are several advantages associated with the use of these third party logistics companies like:

• Time and cost savings: Since these 3pl companies have logistics as their core competency they:

o Are much more knowledgeable about warehousing, distribution and general logistics,

o Have greater experience in dealing with problems and hassles that crop up,

o Operate through a global network which ensures greater efficiency of work thus translating into time and cost savings and

o Keep updating and adapting their systems to be able to meet the demands of their customers.

• Lowers the capital requirement: Outsourcing the logistics to the third party means that the manufacturer or production company does not have any need for investing capital in maintaining a warehouse or transportation facilities. This enables the company to invest a lower capital into the business and fully utilize the invested capital for its core competency which is manufacturing.

• Focus: Outsourcing to logistics companies like the 3pl Logistics Companies in Mumbai, enables the manufacturing or producing company to concentrate and focus fully on the manufacture and sale of their products thereby ensuring effective utilization of both resource and capital.

• Flexibility: Third-party logistics companies have greater flexibility in terms of geographic distribution since they tend to factor in the distance to be covered when they calculate the cost of shipping. In fact, most 3pl logistics companies have something known as zone skipping which results in the lowering of the customer’s shipping cost due to the shortening of the distance between the products to be shipped and the ultimate delivery destinations. With the logistics being taken care of at lower costs, it becomes possible for the manufacturer or producer to manage their workforce better and convert fixed costs into variables.

Disadvantages of using 3pl

However, just as every coin has two sides, there are certain disadvantages associated with the hiring of third-party logistics firms like:

• Loss of overall control: When logistics are outsourced, the third party to whom the outsourcing is done starts to communicate and interact with the manufacturer’s suppliers and customers. In fact, there have also been instances wherein the logistic company might also brand them as being direct representatives of their clients thus resulting in a total loss of control for the manufacturer or the producer.

• Loss of communication: Since the systems of the clients and the 3pl companies are not interoperable, there are times when there is an absolute lack of communication between the resulting in a delay in delivery and loss of face for the manufacturer of producer employing the 3pl firm.

However, the above disadvantages can be worked upon and revered and are hence not insurmountable obstacles. Thus it would not be wrong to say that employing a third party to look after their logistics is actually an extremely viable proposition for the manufacturers or production firms.

Total Views: 72Word Count: 577See All articles From Author

Add Comment

Service Articles

1. 5 Important Benefits Of Using A Mobile Workshop
Author: Rapidcabin

2. Best Catering Services In Delhi Ncr | Merry Curry
Author: Elika Madaan

3. Things You Should Understand Before Getting Human Hair Extensions
Author: Catherine

4. Airport Taxi Transfers Amsterdam – Moving Conveniently In The City
Author: Smith Jackson

5. The Taxi Economico Amsterdam That Is Light On Your Pocket
Author: Ciro Chiellini

6. 5 Reason Why Sms Marketing Is Better Than E-mail Marketing
Author: Abdeali Vohra

7. 6 Simple Tips To Create Your Fantasy Sports Business
Author: Robbie Royce

8. The Most Innovative Things Happening With Brand Awareness
Author: Onering

9. Online Store Shopping – Buying Usb C Desktop Dock Charger
Author: Balaji Raghunathan

10. The Ultimate Rice Military Catering For Your Upcoming Festive Events
Author: Brian Daoud

11. 5 Effective Ways To Scale Your Business With Magento
Author: Jonathan Paul

12. Dwellze
Author: Kater

13. Pvc Guttering Installation – Get The Best Contractor For The Job
Author: Joesph Burns

14. Features And Importance Of The Cpe Bags In Varied Industries
Author: Linda

15. Getting Familiar With Nck (network Code Key) Activation
Author: Imei

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: