3rd Party Logistics Provider is the provision of services by specialists in logistics management. They are Third party organizations that have expertise in supporting the work of non-core functions of employer companies or we called the 3PL Provider is service provider of logistics activity. Because the distribution and transportation may not be the business or core competencies of employer companies that high cost may be occur if they do by themselves so they Often outsource experts to responsibility for Logistics activities. Reasons are as follows ;
2. The organization should provide experts with the ability to perform tasks and responsibilities in respect of connection to their customers.
3. Logistics Management and distribution must be able to operate with flexibility. This necessary to provide 3rd Party Logistics Companies with the expertise for responsibility, for the examples of flexibility such as : Flexible in resource using of operation, providing expert guidance decay, to share responsibility for some activities and enables organizations to reduce cost, work load, employ people. The experts working instead gives employer companies the flexibility to adjust the amount of resources used to support the work better than thay can manage.
4. This builds on the company's expertise to respond and support the work of the organization.
5. Reduce investment and overall costs. Because Logistics management can be considered as part of the required investment in resources and many operations. To create a distribution network ever since providing, transportation, supply warehouse stores, recruitment work and operational support systems and so on.
If summary process from suppliers to customers is as follows ;
Suppliers -> Manufacturing -> Warehouse Management -> Distribution (using 3rd Party Logistics Provider) -> customer.
So merit from using of 3PL Provider in operation is :
- Flexibility in operation
- The organization has focused on more important activities
- Builds on the expertise of Third Party Logistics Provider
- Reduce costs and investments as a whole
3PL Logistics users rate their relationships with their suppliers highly, citing 3rd Party Logistics use as a route to price reductions, asset reductions, and shorter order cycles likewise as a supply of innovation. For many, client service and busness method efficiencies are often enhanced through relationships with 3PL Logistics Provider. however these edges sometimes solely happen because the results of centered initiatives to create robust relationships and thru the employment of detaied contracts that embrace clear expectations and metrics. Due diligence is additionally needed to pick suppliers who have demonstrated the flexibility to fulfill service-level commitments, invest in continuous enhancements and achievements in offerings, and scale back prices — the foremost common issues users have with their 3rd Party Logistics Provider.