3pl providers refer to companies that are hired by other companies to provide outsourced logistics services to them in managing their supply chain. They relieve the management some of their duties by providing them with an opportunity to outsource some or all of their duties in the management of the supply chain. They offer many services which are usually integrated. Some services offered are freight consolidation, contract and public warehousing, transportation management, distribution and inventory management. They have proved to be of great use to businesses in the efforts aimed at reducing the 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 requires that a quotation requesting information be made. This document should furnish the targeted companies with all the information needed. A detailed quotation will facilitate satisfaction of all the required logistics. The information to be included includes the number of items, the warehouse size, the volume involved, and the number of deliveries required.
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 requires that a quotation requesting information be made. This document should furnish the targeted companies with all the information needed. A detailed quotation will facilitate satisfaction of all the required logistics. The information to be included includes the number of items, the warehouse size, the volume involved, and the number of deliveries required.
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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