Pros And Cons Of Hiring 3PL Companies
by Divya S. Content WriterManufacturing
units are mostly located in remote areas or outside the city. They need to have
their in-house storage areas for keeping materials and finished goods. All
these arrangements may seem less whenever there is any change in the order size
in a positive direction. Increase in market size is one of the situations where
the role of 3PL companies in India becomes
important. But, what the other benefits are, let’s find out.
Before we weigh the pros and cons, let’s find out what
actually the 3PL companies do. Their important specialties are:
a. Contracting the
movement of raw materials and finished goods
b. Procurement of
suitable transportation needs
c. Inventory
management and audit
d. Freight brokerage and
audit
e. Shipment tracking and
audit
f. Reverse
logistics for carrying back the excess materials and goods to the origin
Important
benefits of 3PL companies
The 3PL companies or third party logistics companies
are involved in the matters of managing the supplies for production and
distributing the finished goods to the points of sale. These companies know all
about the storage, packaging and movement needs of the goods and have the best
possible infrastructure for carrying out these processes. So, the manufacturing
unit can eye for higher and better goals year on year without wasting resources
on the processes surrounding the main activity.
When the whole of supplies management and logistics are
contracted out to professionals, the costs are greatly reduced. The
manufacturing unit managers need not worry about the shipping concerns,
materials management, warehousing requirements and security of the goods and
raw ingredients stored in a remote location. Since all these activities
individually can cost a lot, contracting offers the pocket-friendly way of
doing so.
Easy management of shipping issues like items lost or
damaged in transit, uncertainty of delivery schedule, brokerage issues, etc. is
also possible when the job is given away to the professionals. The
manufacturing unit is involved only in assuring the production of the best
quality goods as per the contract terms, when such administrative issues are
handled separately.
Doing market research in the territories requires huge
effort. The shipping and logistics management companies located in the target
territories come with the goldmine of knowledge about the demand overview in
the new market, customer expectations and behavior and so on. So, creating a
new warehouse point in an unknown territory is way dicey than using the
existing ones for the purpose.
Last but not least, the third party logistics
companies can be depended upon for the fulfillment services, making it easy for
the makers to attend to customers demanding single or low quantity of products.
These locally situated logistics companies make the delivery process quicker
and accurate too.
Though all looks well from the points mentioned above,
but the cons of hiring the shipping and logistics companies cannot be ignored.
Here
is the catch
The 3PL logistics companies
may have loads of benefits to offer, but the onus lies on the brand to find out
who to associate with and in what way. Some of the challenges of hiring these
logistics partners like the top
warehousing companies in India are:
a. The logistics
companies’ record has to complement the brand image
b. The logistics
companies should not have painted a rosy picture only for taking the order
c. The cost of
hiring the logistics support providers can be a big concern
d. Going back to the
in-house logistics management can become almost impossible in the want of
experience and knowledge about trending situations.
So, do in-depth research before assigning the job of logistics
management to third-party companies. It is helpful in multiple ways.
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Created on Jul 9th 2019 02:06. Viewed 1,251 times.