Third Party Logistics In Supply Chain Management Definition
Third party logistics (3PL) providers offer outsourced supply chain management services that can include transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.
A 3PL company typically has a network of facilities and transportation modes that allow it to execute supply chain operations on behalf of its clients. A client company will use a 3PL provider when it does not have the resources or expertise to efficiently manage its own supply chain.
For example, a clothing manufacturer might use a 3PL provider to store finished products in warehouses close to its retail customers. The 3PL provider would then be responsible for managing inventory levels and shipping products to stores as needed. This would allow the clothing manufacturer to focus on its core business of designing and producing garments.
Third party logistics providers can offer a wide range of services, which can be customized to meet the specific needs of their clients. Some common services include:
• Transportation management – arranging for the pickup, delivery, and tracking of shipments
• Warehouse management – receiving, storing, and distributing inventory within a warehouse
• Inventory management – tracking inventory levels and reordering when necessary
• Packaging – selecting and preparing packaging materials for products
