Tuesday, January 20, 2015

Third Party Logistics– A New Lifeline of Commerce


Just like the flow of blood in the arteries forms the lifeline of the human body, the seamless flow of products and cargo forms the lifeline of any economy. When this lifeline is clogged, the economy suffers and commerce comes to a standstill. When this lifeline is robust and efficient, commerce flourishes. This makes it perfectly understandable that economic development of any country is largely dependent on its connectivity and ability to deliver goods and services.

Given today’s competitive scenario, the logistics sector around the world has now become a high-activity segment with a considerable buzz around it, especially as product life cycles have shortened and supply chains have become more complex.

Recently, many logistics companies initiated a series of initiatives to beat the slowdown. They have worked closely with the clients to provide them services specific to their needs. One of such initiatives is Third-party logistics (3PL). 3PL has already started flourishing in many countries due to the emerging trend of companies looking to outsource their logistics requirements in order to rationalize costs. After all, 3PL outsourcing leads to better economies of scale, higher efficiency and an ability to cut losses from the supply chain.

3PL

Since today’s supply chain managers are aligning their sourcing strategies to broader business goals, the concept of Third Party Logistics has swept through the logistics industry and transformed the way companies do business. Needless to say, 3PLs offer an integrated solution and various value added services.

Today 3PL companies rely heavily on technology to collaborate, connect, and engage with customers. Vendor managed inventory (where the supply chain vendor monitors the buyer’s inventory and makes periodic resupply decisions) is common, even in the smallest 3PL via web-based portals. The 3PL landscape is tipped to experience further growth and change as mobile technologies and ‘smart’ working practices develop. With the growth in third party logistics markets forecasts to be as high as 15 %.

From the initial consultancy and design to final mile delivery and reverse logistics, it is vital to provide a comprehensive suite of services for the complete life cycle of a product. This is why; it is high time to recognize the need of clients by providing integrated multi-modal logistics solutions. With industry specific tools and techniques, logistics players need to enable businesses to properly diagnose problems, work around disruptions and determine how to efficiently move products in any situation. 3PL certainly has potential to be one of the solutions.

Clearly in future, integrating customers with a broader range of solutions will become a way for 3PL providers to form lasting partnerships and become more profitable in the future.

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