WHAT IS THE ROLE OF 3PL IN SUPPLY CHAIN MANAGEMENT?
In decades past, the entities that handled supply chain issues for large companies were much more separated. However, technology and globalization have brought them closer together today. Third-party logistics companies started to grow as companies expanded to reach customers around the globe and as those companies outsourced multiple supply chain services. Today, courier tracking software and similar programs make it easier for large companies and shipping carriers to plan and track their outsourced delivery services.
3PL IN SUPPLY CHAIN MANAGEMENT
For all companies, the overall goal of supply chain management is to achieve sustainability while maximizing benefits for the company and for the customers. 3PL companies provide logistics planning, material procurement, product sourcing, and other services.
Some 3PL providers also meet warehousing and fulfillment needs for companies that need quicker deliveries. For example, if a company has only one warehouse on the East Coast but has customers all over the nation, they may decide to work with a 3PL company that provides warehousing, fulfillment and logistics services near the West Coast. This could save the company money on warehousing and shipping if they offer fast delivery for a low price.
3PL companies that provide logistics services use route optimization software to create the most efficient delivery plan in terms of cost and time. This is true whether they serve businesses or shipping carriers. Many 3PL companies have the necessary resources to make both simple and complex shipments possible.
In a way, 3PL companies are an efficient and a multi-purpose link in the modern supply chain. If they meet needs from warehousing and fulfillment to courier management service, they give any company a powerful boost toward meeting its supply chain objectives. These are some of the potential outcomes that help companies meet supply chain goals:
- Inventory can increase without the need for significant capital funding or expansion.
- Average shipping times are faster.
- Delivery accuracy and tracking both improve.
- Order fulfillment times are shorter.
- Sourcing needs may be reduced.
THE RISE OF 3PL
According to a 2015 report, 3PL services were used by more than 95 percent of Fortune 100 companies and by more than 85 percent of Fortune 500 companies. Also, most of them were highly satisfied with how the 3PL companies met their needs. 3PL companies of all sizes can benefit from partnerships, and the rise of 3PL providers is a great advantage for shipping carriers.
For example, a 3PL company that offers last mile delivery and logistics solutions that are personalized can help a carrier that has a hard time making those last delivery trips to the homes or businesses of the shipper’s customers. Speed and quality are crucial for this final part of the process. Carriers that need to improve this part of their business or other supply chain activities that relate to 3PL can benefit from the powerful courier dispatch, tracking and planning tools found in the Key Software Systems program. Our program’s design is versatile enough to meet the needs of all sizes of carriers.