Choosing a 3PL, or third-party logistics, the provider can get convoluted. This company is getting control over major aspects of your supply chain. Their performance will have a big impact on how your company is viewed. So, what are your options?
First, it helps to take a step back and understand what a 3PL provider is. When you hire a 3PL, you are paying this company to handle all or certain aspects of your fulfillment process. The benefits of this are that you can save time by outsourcing the work.
There are several kinds of 3PL companies to choose from and their differences lie in what jobs they perform.
Types of 3PL Providers
1) Full Service
This 3PL company is exactly as it sounds. It takes on every aspect of the fulfilling process: inventory management, shipping, yard management, and more. The benefit is obviously that you don’t have to get deeply involved and can focus on other areas of the business.
2) Transportation/Freight Services
Perhaps you just need help with transporting your items. This could include transportation to your warehouse, to the customer, or both. A 3PL transportation service will work with the other parts of your supply chain to move your items.
3) Warehouse Services
Having your own warehouse to store and prepare your items for shipment is a big investment. There are 3PL companies that have their own warehouses and can provide the service of handling and preparing your items for delivery.
If you have a larger company, you will probably need to work with a provider with multiple warehouses. They will be able to meet more demands, like speedy delivery times. Make sure they can work within the other management systems you are using to track your progress.
4) Information Services
The world is becoming increasingly digital. Not only is the internet used to communicate to customers and update them on shipments, but it is also used to track the entire supply chain cycle.
Many different parts of the business are impacted positively or negatively based on your digital services. You can hire a 3PL service to focus on the digital part of your fulfillment service.
They can also provide information on the financial aspects of your supply chain. These statistics can show how you have grown, where you need to develop, and what you should improve.
Is a 3PL right for your business?
There are multiple ways that hiring a 3PL service can help your business. But not every business is the same. There are questions you can ask yourself to see if this the right move for you.
Figure out your workload. How many orders do you have to fulfill every day? Perhaps the workload is not enough to require hiring a 3PL company.
Identify your space and equipment needs. Taking on a warehouse and vehicles is a weighty investment. If you have come to the point where this is necessary going forward, a 3PL provider that has this capacity might be the way to go.
There are so many ways to integrate 3PL solutions into your supply chain, whether it is full service or just taking over a small part of it. Knowing what you are looking for initially will help you find the perfect match faster.
American Manufacturing Solutions is a supply chain logistics company that helps to enhance your operations by developing systems along every line of the process, from the warehouse to shipment. With over 70,000 square feet of space across multiple locations, our expert logistics knowledge and fleet of vehicles are there to make your fulfillment process better.