Third Party Logistics - How It Benefits All Stakeholders
by Divya S. Content WriterThe
Challenge of Logistics
Logistics is nothing but managing the flow of goods and
information from one point to another. It includes the dispatch of raw material
from the supplier to the warehouse. The production floor collecting raw
material from the warehouse and finished products reaching the warehouse and
being stored. Most importantly, it is all about how finished goods reach the
customer from the warehouse. Manufacturing concerns need to worry a lot about
logistics and is it represents time and money.
Time is the speed at which material and goods move from
one point to another. Any delay in movement can affect further processes. Money
is an issue as lots of money is being spent on manufacturing the product. It
needs to stored properly and moved on time so that the money can be realized
from the customer. Also, certain products need special storage. In such cases,
additional investments are needed, eg: cold storage. Logistics is thus a highly
challenging operation for every manufacturer, retailer or stockist.
Third-party
Logistics
Outsourcing has become very common nowadays in almost
all areas. Organizations outsource their HR activities and accounting
activities. Outsourcing in the field of logistics is thus a good solution for
businesses to handle the logistics challenge. Here’s where the concept of 3PL
or Third Party Logistics comes into the picture. A 3PL provider can handle a
part of the firm’s logistics operations or the entire operations.
When you as a businessman outsource your entire
operations to a third party, you are relieved of the tensions of how the flow
of goods and storage is managed. It is now the responsibility of the 3PL
entity. You need to have a contract with him outlining all the requirements and
you can relax and concentrate on your core work.
Growth
Third Party Logistics has become extremely popular. In
earlier days, a business would worry about how to entrust their precious goods
to someone else. But today things have changed thanks to the growth of
professional 3pl
Logistics Companies in Mumbai and all other cities of the country. The
3PL industry is expected to reach a value of 48,000 crores by the end of 2019.
One of the main reasons is the huge growth of the retail sector with leaders
like Amazon, Flipkart,and Snapdeal leading the retail business.
Apart from the retail giants, there are many MNCs in
India from the pharma industry and the FMCG industry that are using the
services of Third
Party Logistics India companies. This has been a positive development
for the sector and has led to a boom.
Also, the Government is investing heavily on
infrastructure with good road services, ports, and exclusive freight corridors.
All these have turned out to be drivers for the rapid growth of the 3PL sector
in India.
Win-Win
for everyone
Without a doubt, 3PL is a win-win situation for all the
parties involved.
1)
For
the Manufacturer: Having an agreement with a 3PL firm means they need not worry
about logistics. It represents huge savings in time and effort and also
provides cost benefits. Large 3PLs deal with multiple clients and offers substantial
cost benefits to companies.
2)
For
the Customer: With a professional agency handling logistics, customers can be
assured that their product reaches on time, without any hassles.
3)
For
the third party: The third party agency benefits as he can make use of his
experience and expertise and enter into contracts with top companies. The 3PL
firm is assured of regular work and the business is definitely lucrative.
3PL is thus highly beneficial to all stakeholders and
will see more growth in the days to come.
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Created on Feb 14th 2019 05:57. Viewed 368 times.