Outsourcing the Logistic Operations to 3pl

Third Party Logistics Provider TLMT 352 Briefly describe role Third Party Logistics Provider (3PL). What advantages 3 PLs bring? Are disadvantages a company outsourcing logistics functions a 3PL? A third party logistics provider is an independent company that provides single or multiple logistics services to other companies or shippers. The third party logistics provider will offer warehousing, freight weight negotiation, forecasting, transportation management software, in-depth reporting, and freight bill auditing (Hertz & Alfredsson, 2003). Currently 3 PLs provide strategic coordination for their clients supply chain.

This means that they not only offer transportation and warehousing services, but they also offer on-time delivery of goods to the clients customers, and packing at reduced costs. 3 PLs offer value added services to the supply chain, which give the client a competitive advantage over their rivals. By outsourcing their supply chain activities, a client is able to focus in their core business and not worry about the delivery and transportation of their goods. 3 PLs will offer their clients the best and cheapest prices for transportation of goods.

They are able to negotiate for lower prices since they perform these activities on a daily basis. Warehousing services will enable a client to only ship the goods required and keep the rest in safe storage. Warehousing facilities could be offered in different locations, which would allow the client to deliver goods to the customers quickly. The client will have access to the transportation management system which allows the client to keep track of their goods at any given time.

Advantages of 3 PLs Using a 3PL will allow a company to reduce their operational costs, and enable the client company to focus on its core competencies. A 3PL will offer its customers enhanced tracking of their goods, integrated transportation systems, and increased efficiency. Third party providers invest in innovative technology that will allow them to provide enhanced monitoring. Enhanced monitoring will ensure that climate sensitive goods are transported in the desired temperature.

3 PLs operate multiple fleets of ships and trucks, and they have multiple storage warehouses and shipping ports, which ensure that they can offer one solution to a company (Halldorsson & Skjott-Larsen, 2004). This is beneficial to the company, as it will only deal with a single company for all its supply logistics. Dealing with a single company is beneficial as it reduces the paperwork and increases efficiency. 3 PLs will offer their clients the flexibility and scalability of transporting their freight.

The companies will offer their clients the ability to scale on labor, space, and transportation. Continuous optimization is critical for the success of the 3PL. The companies have the requisite resources to make improvements and adjustments to the supply chain links. This improvements and adjustments will ensure that the 3 PLs are optimizing their operations, which is beneficial to them, and their clients. Restructuring the supply chain ensures that the correct amount of goods are delivered where and when required.

Disadvantages of 3 PLs The client will not have any direct control over their logistic operations. The 3PL will directly manage the logistics operations and only provide the client with updates on the progress. The company will constantly rely on the 3PL to ensure that they deliver the goods as promised and on time. Any problems that the 3PL faces will directly affect the client and this could disrupt the supply chain.

If the 3PL fails to deliver goods as specified to the customers, this could result in the clients reputation been damaged. The pricing models.