Business operations are currently becoming more complex than ever before. 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 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 for the delivery of services using a third party. The business is freed from the requirement of having their own warehouse and hauling services in favour of hiring services of fulfilment specializing in storage and supplying taking care of support operations.
At some point during business operations, you need to make decisions concerning the necessity to increase storage space and merchandise handling capabilities because of an increase in market demands. In circumstances where extra capital expenditure cannot be provided due to the financial position of the company, contracting fulfilment is the best alternative. It provides the required capability with a quick turnaround time that’s not achievable if the organization decides to expand. Whenever there’s an urgent need for the storage area in response to an expansion in market coverage, a contract warehouse acts as your fast management alternative. 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 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 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.