Tag Archives: 3rd party logistics

What Is Logistics Management and Why Is It Important?

As freight volume grows and transportation becomes more complicated, the need for robust logistics management increases. Logistics management is a primary factor in the success of any company’s operations and has a direct impact on its bottom line. Additionally, meeting customer demand and providing superior service is one of the goals of good logistics management.

What is Logistics Management?

According to the definition of The Council of Supply Chain Management, “logistics management is a part of supply chain management that plans, implements, and controls the efficient flow and storage of goods, services, and related information in order to meet customers’ requirements”.

Fundamentally, logistics management is the control and supervision of the movement of goods. However, the scope of managed processes reaches far more than that. It involves a multitude of different factors including transportation management, freight and inventory management, materials handling, and order fulfillment.

what is logistics management

How Logistics Management Can Benefit You?

Increased customer satisfaction

Consumers demand better service, and this mandate creates a need for shippers to provide fast, accurate and quality service. Good management strategy is aimed to constantly optimize transportation processes and eliminate disruptions. Therefore, it has a direct impact on your customers’ satisfaction. Improved customer service can bring a good reputation to a company’s brand and help generate more business. The smoother the freight moving processes are within and beyond your company means that you will provide more value to your clients. Ultimately, well-handled logistics contributes to the overall positive customer’s experience.

Visibility and insight Cost Savings

It is important to create visibility into a company’s supply chain. Advanced transportation management systems (TMS) analyze historical data and track the real-time movement of goods in and out of a business. Logistics managers can use this information for process optimization and avoiding potential disruptions. TMS data analysis keeps a company’s supply chain moving more efficiently, all while gaining operational insight.

Cost Savings

Managing logistics on a proper level will give a company control over inbound freight, keep inventory at optimal levels, organize the reverse flow of goods, and utilize freight moves on the proper transportation modes – all of which can cut costs significantly.

Key Logistics Management Goals

Essentially, before turning to external help and investing in management technology, you want to make sure it will bring beneficial results. That’s why it is important to know how to measure the effectiveness of any new practices.

  1. Increase revenue
  2. Improve operating cost structure
  3. Reduce overall transportation costs
  4. Improve customer service

Many companies look to third-party logistics providers (3PL’s) for help as this simple concept can often become very complex and not so easy to execute. 3PL’s have the expertise and advanced technology to cut costs and improve processes much more efficiently than companies can in-house.

Learn more about PLS Management Services and contact us now for a free logistics analysis!

What is a 3PL? And Why Do Companies Use it?

What is a 3PL (Third Party Logistics Company)?

A third-party logistics provider, or 3PL, is an outsourced company that manages all or a particular part of a company’s logistics operations and executes transportation, freight management, and other activities.

In it’s simplest form, a 3PL firm coordinates and manages functions for better transportation and supply chain efficiency. Also, the new study reported that 65 percent of shippers are increasing their use of outsourced logistics services.

Why Do Companies Use Third-Party Logistics Providers?third party logistics

A 3PLs may manage a single part or a multitude of different supply chain processes within your company. Also, third-party providers are capable of managing multiple areas of your supply chain. To put it simply, companies use third-party logistics providers to manage their logistics operations in a productive and cost-efficient manner. Additionally, there are many other reasons why companies use 3PL’s, including:

Time savings

3PL’s save companies the time they would normally spend carrying out the management of their supply chain. Logistics firms also save them from costly mistakes that could take an ample amount of time to fix.

Continuous optimization

3PL’s have the ability to make modifications to each connection in the supply chain when needed. The company benefits from the continuous improvements made to their logistics process when they outsource a logistics firm.

Cost savings

Logistics firms offer lower transportation rates and can help reduce return goods cost and lost sales. Thanks to relationships with carriers and experienced freight brokers, 3PLs can negotiate lower rates for you and ensure to eliminate unnecessary costs.

Capacity

Regardless of the season, 3PLs give you access to capacity and required equipment. Through their relationships with thousands of carriers, third-party logistics providers ensure to support your freight volume. Also, they give you the opportunity to optimize inventory and warehouse management.

Expertise

3PL’s have expertise and thorough industry knowledge, and they can accurately forecast what will work best for their customers. They have technology that is able to produce advanced reporting and inventory management, tracking the entire logistics process.

When companies choose to work with a 3PL provider, they fully reap these benefits as the 3PL truly becomes an extension of their team.

To learn more and to see first-hand how a 3PL can help you manage your logistics, contact us today for a free transportation cost analysis.