Overview of Third-Party Logistics
Third-party logistics (abbreviated as 3PL, or TPL) is an organization's use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services. A third-party logistics provider (3PL) is an asset-based or non-asset based company that manages one or more logistics processes or operations (typically, transportation or warehousing) for another company.
Meaning of Third Party Logistics Provider
Third-party logistics (abbreviated as 3PL, or TPL) is an organization's use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services. A third-party logistics provider (3PL) is an asset-based or non-asset based company that manages one or more logistics processes or operations (typically, transportation or warehousing) for another company.
Third-party logistics providers typically specialize in integrated operations of warehousing and transportation services that can be scaled and customized to customers' needs, based on market conditions, to meet the demands and delivery service requirements for their products. A provider of such integrated services is referenced as a third-party supply chain management provider (abbreviated as 3PSCM), or as a supply chain management service provider (abbreviated as SCMSP). 3PL targets particular functions within supply management, such as warehousing, transportation, or raw material provision.
Services Outsourced
Given below are the activities and services that are typically managed by third party logistics providers:
- Domestic transportation
- Warehousing
- International transportation
- Customs brokerage
- Freight forwarding
- Freight bill auditing and payment
- Cross-docking
- Reverse logistics
Lead Logistics Provider
A lead logistics provider (abbreviated as LLP) manages all logistics activities for a company, including management of 3PLs. It is sometimes referred to as a fourth-party logistics provider (abbreviated as 4PL) because an LLP functions as a third party overseer of other third parties.
Benefits of Outsourcing
Outsourcing a supply chain process can help a company achieve several benefits, particularly by enabling it to focus on its core business. Given below are some of the benefits:
- Cost savings and reduced cycle times.
- Better tracking of key operational functions.
- Decrease supplier costs through leverage of volume discounts
- Improved adherence to policies.
- Improved inventory performance
- Ability to use leading-edge technology and industry best practices
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Miscellaneous Warehouse Processes
At the end of each inventory control, the Contractor provides the Ordering Person with an inventory report which contains a list of all stock adjustments. The Ordering Person uses the report to create, by use of his/her own means, necessary value and accounting adjustments related to the stock. Let us look at some to the mislaneous warehouse processes not covered earlier.
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The Outbound process starts with routing the shipments. The Outbound execution process starts from the point when pick tasks are completed for an outbound shipment and ends at the point where the outbound packages are loaded into trailers. The Warehouse Outbound process includes managing and controlling outgoing materials starting from the download of orders through to the shipping of products from the warehouse.
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Warehouses may seem like a simple, straightforward concept, but they actually include a variety of different types of warehouses that all have their own niche. The type of warehousing that’s right for you depends on your specific industry, location, and needs. From private warehousing, distribution centers, and climate-controlled warehouses, there’s an option to suit every business.
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When a customer wants a product that has been stored in the warehouse, the same need to be picked off the shelf (or off the floor) and get it ready for shipping. Depending on how big is the warehouse, picking can take a while. (Many distribution centers cover more than 1 million square feet.). Hence, warehouse order picking methods are an important aspect within any warehouse.
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What is a Warehouse & why companies need them?
All organizations hold stocks. In virtually every supply chain, gaps exist between when something is produced and when a customer is ready to buy or receive it. Stocks occur at any point in the supply chain where the flow of materials is interrupted. This implies that products need to be stored during this period of gap.
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Inventory is money, and hence businesses need to perform physical inventory counts periodically to make sure that their inventory records are accurate. The traditional approach to conducting inventory counts is to shut down a facility during a slow time of year to count everything, one item at a time. This process is slow, expensive, and (unfortunately) not very accurate.
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One of the warehousing best practices that retailers like Walmart, Amazon, and Target have adopted is known as cross-docking. During this process the inbound products are unloaded at a distribution center and then sorted by destination, and eventually reloaded onto outbound trucks. In real parlance, the goods are not at all warehoused but just moved across the dock (hence the name).
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When products arrive at a facility, there need to be a defined process to let them in. The process for accepting inventory when it arrives is called "Receiving". Any warehousing operation must be able to receive inventory or freight from trucks at loading docks and then stow them away in a storage location. Receiving often involves scheduling appointments for deliveries to occur, along with unloading the goods and performing a quality inspection.
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One of the most important decisions when running a warehouse is its layout. Warehouse layout defines the physical arrangement of storage racks, loading and unloading areas, equipment and other facility areas in the warehouse. A good layout aligned with the business needs could have a significant effect on the efficiency.
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Warehouses can be places where piles of packed or loose products occupy space. If left disorganized, it will become very challenging to identify products for packing or picking. Hence, proper organization of warehouse is very important. Warehouse labeling systems eliminate this problem by making sure products are easily identified and managed during the warehousing and shipping process. Labeling is the most functional and cost-effective way to keep your warehouse organized and operating efficiently.
