Business operations are getting more and more complex by the day. 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’s now a common practice to outsource business requirements that are related to third-party service providers. This has given rise to the development of a set of businesses popularly 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 transporting services in favour of handling support operations and getting the help of a fulfilment specializing in storage and handling of support operations.
There are particular states in the course of the company operations where decisions needs to be made on the requirement to expand storage space as well as merchandise handling capabilities due to increases demand in the market. 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. A contract warehouse is a quick management alternative in cases where there’s an urgent demand for the storage area in response to a rise in market coverage. 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. You can simply work out a service arrangement with a fulfilment to facilitate the delivery and handling of logistics required for handling, storage and movement of products within the distribution chain. The 3PL provides the facilities and the needed labour to operate the facility. Thus, other than the company capital needs, the company won’t require more workers for the expanded capacities and the operations.
When you discuss with the fulfilment company regarding the needs of the business, the former takes charge of supplying the workforce and logistical operations. 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 buy new trucks to transport your goods as the 3PL provider manages a fleet of delivery trucks.
You can even opt for collection and billing of the account into the third party service provider as it might be cost efficient that you outsource the full business operation cycle. This unloads responsibilities of the company’s accounting and billing department since the 3PL company shall be handling those responsibilities.