Today, business operations are getting more and more complicated. Some companies have no option but to deviate from the traditional way of doing business to allow them to keep up with the demands of the market and the business as a whole. It’s currently a frequent practice to outsource some related company needs to third-party service providers. This has given rise to the development of a set of businesses popularly known as supply chain providers. This accepted and popular business is sought by small business interest and involves the engagement of third-party logistics supplier. These are cost-effective management options that are supplied by 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 additional capital expenditure is not available due to the existing financial constrains position of the company, contracting fulfilment serves as a sensible option. It provides the expanded capability with a quick turnaround time that’s not viable if the provider decides to expand with the company capital expenditure. 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 provides the facilities and the needed labour to operate the facility. Thus, other than the company capital needs, the company won’t require more workers for the expanded capacities and the operations.
When you discuss with the fulfilment company regarding the needs of the business, the former takes charge of supplying the workforce and logistical operations. As an example, if you’re outsourcing the shipping of goods to your new sales territory, the service provider shall take control of the storage space needed to handle your additional sales territory’s. 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 relieves extra responsibilities of the business accounting and billing department since the 3PL company will be taking over the collection and billing responsibilities.