3PL Explained: What is its role in Supply Chain Management? Third Party Logistics: Who, What, When, Where, Why, and How? S e 3PL scw Understanding the world of third party logistics can be complicated and intimidating, There are endless acronyms and lingo that can take years of experience to become fluent in, This blog post looks to simplify and explain third party logistics in a way that everyone can understand, through the 5 Ws and H. WwHo? TI party logistics providers are businesses professionals that take care of the logistical parts of your business, by using personalized solutions for your products/services and your customers. 1___. They aren't just for major enterprises either; in fact, smaller companies often find it more sustainable to outsource activities such as warehousing and distribution to 3PLs, as they may lack the resources to build and maintain in-house business units dedicated to these functions. WHAT? Third-party logistics is a business model that offers services on a fee-for-service or contractual basis, alloy ing you to outsource operational logistics activities, fromwarehousing, all the way through to delivery 2 . They can provide any number of logistical services affecting a supply chain, which may differ from company to company, as 3PL clients typically outsource a customized set of services based on unique needs, including (but not limited to): = Transportation = Warehousing = Pick and packing = Inventory forecasting = Order fulfillment = Packaging and freight forwarding — Distribution Management — Freight Consolidation = Last Mile Delivery WHEN? The logistics industry may have a lengthy history, but the third party logistics (3PL) sector is less than 40 years old. The 3PL industry has evolved over the years to meet the change of customer's preferences and increased involvement in the logistical process .3___. This shift can be attributed to the Motor Carrier Act of 1980, which deregulated the trucking to fre industry and allowed warehousing companies to easily move ht management, In the 1990s emerging global markets led to the popularity of global logistics as companies expanded their product reach. With new worldwide trade zones presenting new challenges for companies that were used to the domestic market, 3PLs closed the gap for logistical services in the marketplace.4__. Both domestically and intemationally, 3PL providers offer integrated logisties services to help shippers address those complexities, and continue innovating today, and into the future as technology like warehouse management systems (WMS) have taken the world of logistics and supply chain to new levels. If you are ready to take your business to new levels, here are some indicators of when you should consider working with a 3PL: 1, You've run out of storage space for your inventory. 2. You want to offer your customers expedited shipping. 3. You want to save money on storage and shipping. 4 ‘You find yourself wanting room to grow with your company5. You're spending more time shipping your products/delivering your services than the time it takes to produce it. WHERE? Third party logistics providers exist all over the country and world, forming vast networks, and spanning millions of miles. 5 . way? = Grow your Business — Increase Efficiency and Cost Savings = Continuous Optimization = Increased Capacity - Gain Expertise HOW? Third party logistics providers make all their services possible by mapping out a supply chain network and working with experts to get your produets/services where they need to be, when they need to be, in the shortest time possible for the best price. They use tools like the previously mentioned warehouse management system (WMS), their extensive logisties sector knowledge, ndustry resources, and new technologies like QR codes to organize your produets Exercise 1. Match the sentences with the gaps in the text. a, But the trend of outsourcing logistics services to third parties gained momentum in the 1980s , Ultimately they enable you to focus on your business by taking away all of the headaches associated with the moving parts of your business. c. Chicago and Houston happen to be two of the largest hubs in the US and are where Supply Chain Warehouse is currently located d. Most importantly, they are members of your team with your goals in mind, seeking to satisfy customers e. Supply chains have only increased in complexity, creating more demand for efficient transportation managementExercise 2. Answer the questions based on the information from the text. 1, Who are third party logistics providers and what do they do for businesses? 2. What are some common logistics services that 3PL providers offer to their clients? 3. When did the third party logistics industry begin to evolve and what factors contributed to its growth? 4, Where can businesses find third party logistics providers and how widespread are their networks? 5. Why should businesses consider working with a third party logistics provider and how can they help them grow and increase efficiency? Exercise 3. Write if the sentence is True (T) or False (F). 1. Third-party logistics providers are only for major enterprises. 2. Third-party logistics providers offer services on a fee-for-service or contractual basis. 3. 3PL clients typically outsource a customized set of services based on unique needs. 4, The third party logistics (3PL) sector is more than 40 years old. 5. Third party logistics providers exist only in certain regions of the world.