For many small-to-medium-sized enterprises (SMEs), managing stock and shipping processes whilst maintaining an efficient manufacturing process can be a challenge. That is why so many businesses are choosing to employ a third-party logistics provider to support them. We put together a quick summary of what third-party logistics means, how it works, and the benefits you and your business can gain.
What is third-party logistics?
Third-party logistics (3PL) refers to the business model in which business owners are able to outsource operational logistics activities to a logistics provider, allowing them to focus on building and developing their business. A 3PL provider is there as a supporting pillar, ensuring as a business owner you can avoid the technicalities of getting your products to your customers. A 3PL provider can provide support to a number of services regarding the logistics of the supply chain, including shipping and transportation, warehousing, stock management, and order fulfilment. As a liaison between your chosen shipping company and you as a manufacturer, 3PL companies are able to deal with the mechanics of turning your business into a successful enterprise.
How does third-party logistics work?
Most 3PL companies are flexible, and offer you support in as many or as few ways you require. The simplest 3PL model includes you sending your inventory to a 3PL provider. This provider then works to deliver your stock to customers. Most 3PL providers will offer a more comprehensive service, which would often include stock management, warehousing, and order fulfilment. At Shipstar, thanks to our existing road haulage infrastructure and extensive stock warehouses, we are able to manage shipping in-house. Alongside our bespoke warehouse management system (WMS) that allows our clients to easily manage their stock and orders, we are a one-stop-shop service.
What are the benefits of third-party logistics?
There are numerous benefits to using a 3PL provider, including improvement on financial and operational levels, as well as improving the customer experience. Operationally, using a 3PL service allows your business to develop, as space, labour, and transportation capabilities can be scaled to match your inventory and business goals. During busy periods, fluctuations in orders can easily be managed and monitored, and made stress-free. Financially, the use of a 3PL service means there is no need to invest in warehouse space, transportation, technology, and even employees, as this is all provided and managed by your 3PL provider. Your supply chain is already optimised, and so you can focus on enhancing your manufacturing process and building on your business. A 3PL provider also provides a premium service to your customers, who are used to a quick turnaround and delivery service. Most providers already have a large transportation network, meaning they are experienced in delivering quickly and efficiently, no matter the location.
Using a third-party logistics service offers immediate support from experts in logistical matters. For more information on using a 3PL service provider, or for information on how Shipstar can help build your business, get in touch on +44 (0)1223 843011 or email us at [email protected].