3pl providers are companies that offer outsourced logistics services to other companies to help in the management of their supply chain. They play a major role in the supply chain by offering services that make it possible for businesses to outsource a fraction or all of their supply chain management function. They offer a number of services that are usually integrated and these include inventory management, distribution, freight consolidation, transportation management, public warehousing, freight consolidation and contract warehousing. They have greatly helped businesses in bringing down the margin of their operational costs.
Third party logistics providers can be generally described as organizations that monitor the storage and movement of goods for the company that has hired them. The way in which these services are provided will always differ depending on the 3pl provider involved. There are three categories of these companies that are commonly known with each working in its own different way.
They are broadly categorized as integrated companies, asset based and the management based type. The companies that are under the assets based category use resource belonging to them to provide their services. The management based type use resources owned by other companies and only offer technology and management related services. Those under the integrated category allow the client company to choose the approach that is best suited to them.
There are several factors that must be considered in the selection of a 3pl provider and they differ from business to business. The decision on whether or not to outsource some the business functions relies to a great extent on the prospects of a company such as expansion, future plans, acquisitions, product lines among other factors. After deliberating on these factors the search for the most suitable company begins.
The selection process of a third party logistic provider involves the submission of quotation which is known as a request for information. This document should be detailed with all the necessary information. The targeted companies are only able to meet the required logistics if they are served with all the requirements of a client. Some critical information includes the volume and number and volume items involved, the warehouse size, the frequency of delivery and so on.
The 3pl providers willing to take the contract then submit their bids which are evaluated to establish if they measure up to the expectations of the client company. Their capacity is assessed to determine their capability of meeting the requirements. The critical things put under consideration are the dock capacity, the technology available, personnel and the space in the warehouse. The geographical location is also important because of network coverage.
The business world is very dynamic and therefore it is important to consider the flexibility of prospective companies. They should be able to respond to changes and make the necessary adjustments as the need may arise. Other critical factors include the cost which should be reasonable, environmental factors with regard to the nature of an enterprise and the preference of the customers.
All the 3pl providers that were being evaluated are then furnished with their final score and the best three are selected. The management team then contacts them and after reviewing their financial report and conducting site visits an interview is done and the best chosen. This process is very important and should be done in the most professional way.
Third party logistics providers can be generally described as organizations that monitor the storage and movement of goods for the company that has hired them. The way in which these services are provided will always differ depending on the 3pl provider involved. There are three categories of these companies that are commonly known with each working in its own different way.
They are broadly categorized as integrated companies, asset based and the management based type. The companies that are under the assets based category use resource belonging to them to provide their services. The management based type use resources owned by other companies and only offer technology and management related services. Those under the integrated category allow the client company to choose the approach that is best suited to them.
There are several factors that must be considered in the selection of a 3pl provider and they differ from business to business. The decision on whether or not to outsource some the business functions relies to a great extent on the prospects of a company such as expansion, future plans, acquisitions, product lines among other factors. After deliberating on these factors the search for the most suitable company begins.
The selection process of a third party logistic provider involves the submission of quotation which is known as a request for information. This document should be detailed with all the necessary information. The targeted companies are only able to meet the required logistics if they are served with all the requirements of a client. Some critical information includes the volume and number and volume items involved, the warehouse size, the frequency of delivery and so on.
The 3pl providers willing to take the contract then submit their bids which are evaluated to establish if they measure up to the expectations of the client company. Their capacity is assessed to determine their capability of meeting the requirements. The critical things put under consideration are the dock capacity, the technology available, personnel and the space in the warehouse. The geographical location is also important because of network coverage.
The business world is very dynamic and therefore it is important to consider the flexibility of prospective companies. They should be able to respond to changes and make the necessary adjustments as the need may arise. Other critical factors include the cost which should be reasonable, environmental factors with regard to the nature of an enterprise and the preference of the customers.
All the 3pl providers that were being evaluated are then furnished with their final score and the best three are selected. The management team then contacts them and after reviewing their financial report and conducting site visits an interview is done and the best chosen. This process is very important and should be done in the most professional way.
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