The concept of outsourcing logistics is evolving with time as more businesses rediscover the benefits associated with 3PL. Many changes can now be seen as this management solution emerges.
Each and every contract warehouse may have its own understanding of the exact definition of the term logistics outsourcing. It is not uncommon to ask oneself of the difference between warehousing and order fulfillment.
Having a clear understanding about these terms with respect to outsourcing logistics is vital so as to put across our desires and goals. Challenges will often come up if one does not understand these terms clearly.
A simple way to understand the nature of services that are part of logistics outsourcing is by assessing the key elements of the market that is targeted by each of the different logistic services.
Watch this video below to understand how 3PL fits in the supply chain:
These logistics services can be classified as follows:
- 3PL warehousing can be described as a third party logistics provider that specializes in warehousing. If you are searching for a business solution that will meet your needs of storage, transporting and handling your company’s products, then the term 3PL is the best term to use. If you want to see a company that provides all these services under one roof, then take a look at http://hollowaystoragesydney.com.au. If you enter into a long-term business contract with a warehouse contractor, then you can gain effective and efficient control of such business operations. The chosen 3PL vendor will perform the role of customizing a distribution system and warehousing management that will meet the specified requirements and needs of your company. Such kind of an outsourcing plan is at times known as 3PL contract housing. The outstanding feature about this logistics outsourcing is being a long term contract.
- Order fulfillment can be described as outsourcing services involving online processing of returns and product orders. Order fulfillment ensures that all the processes required in completing the cycle of product returns and order placement are well handled.In most instances, the client company will remain relatively reserved in sharing full information to a logistics service provider. The client company can go only to the extent of structuring costs related to transporting, handing, and product storage. It is now common to find companies having order fulfillment contracts sharing warehouses in the 3PL outsourcing business.
Basically, a logistics service provider offers two main types of clients. There are small and medium companies, and large client companies.
Some of the large companies that seek to outsource their logistic needs include wholesale distributors, manufacturers, and large retailers.
Such companies seek to outsource logistical requirements that are specific so as to rationalize their operations. In most cases, such companies need 3PL warehousing services. On the contrary, client companies that are categorized as medium and small usually need the support for order fulfillment and service delivery by a third party logistics service provider.
Currently, there is a dynamic growth of online retailers and this means that 3PL services available over the internet will grow in the near future. The general term that is commonly used to describe outsourced logistics services is known as order fulfillment.