Today, business operations are getting more and more complicated. Some businesses are forced to deviate from the traditional method of conducting business so as to keep up with the market demands and the business as a whole. It is now common to outsource business requirements that are related to third-party service providers. This has resulted in the development of a set of business solutions commonly known as supply chain providers. An accepted and sound business resorted to by most business interest involves third-party logistics supplier also called 3PL. These are management alternatives that are regarded as cost-effective and provides the required delivery services by a third party. The company is freed of the necessity of hauling services in favour of having the services of a fulfilment that can handle storage and managing assistance operations as well as provide warehousing services.
There are specific states in the course running of the business where you need to make decisions on the need to increase storage area and product handling capabilities as a result of an increase in market demand. In circumstances where additional capital expenditure is not available due to the existing financial constrains position of the company, contracting fulfilment serves as a sensible option. It delivers the required capability with a fast turn around time that’s not achievable if the provider decides to expand with its own capital investment. Whenever there’s an urgent need for the storage area in response to an expansion in market coverage, a contract warehouse acts as your fast management alternative. What is great about this kind of setup is that you don’t need to make changes in the company to deal with this expanded capabilities. A service arrangement can be worked out between the company and fulfilment for the transportation, logistics needed for handling storage and movement of products along the distribution chain. The 3PL shall provide the facility to run and the necessary labour. Thus, other than the company capital needs, the company won’t require more workers for the expanded capacities and the operations.
Whenever you’re able to have a discussion with the fulfilment company on the particular needs of the business, the former takes responsibility for those operations and offer the labour and logistical demands. As an example, if you’re currently outsourcing the transportation of goods to your sales territory that is new, then the service supplier takes control of the storage area which will be required to set your control point of the additional sales territory. You do not even need to get trucks for transportation of merchandise to the new sales area because the 3PL provider oversees a fleet of trucks for delivery.
You can also opt to transfer the billing and collection of account to the third party service provider as it could be cost effective for you. This unloads responsibilities of the company’s accounting and billing department since the 3PL company shall be handling those responsibilities.