Today, business operations are getting more and more complicated. There are businesses that are forced to deviate from the known way of conducting business to keep up with the business as a whole and the market demands. It’s currently a frequent practice to outsource some related company needs 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 for the delivery of services using 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 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 scenarios where the current financial position of the business cannot get enough capital expenditure, then contracting fulfilment is a sensible option. It provides the required capability with a quick turnaround time that’s not achievable if the organization decides to expand. A contract warehouse is the management solution whenever there’s an urgent demand for additional storage space. 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 will offer the facility to run as well as the human resources to work in the expanded facility. Thus, in addition to relieving the company of the capital needs, the business will not be required to hire more employees for the operations and capabilities.
When you talk about your company needs with the service provider, they will take responsibility for the operations and supply the labour and logistical requirements. For instance, if you’re currently outsourcing the shipping of goods to a new sales territory, the service supplier shall take control of the storage space needed. 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.