Tom Jones, senior VP and general manager of U.S. Supply Chain Solutions with Ryder System Inc., a third-party logistics provider, offers the following advantages manufacturers can gain by using a 3PL:
Improve global capabilities. 3PLs have on-ground knowledge of local markets, regulations and government agencies, and understanding of capacity constraints.
Reduce costs. 3PLs can help reduce excess carrying costs, return goods cost and lost sales. They can also help manufacturers move more material with fewer assets while still meeting customer requirements. In some cases, manufacturers can realize savings when consolidating warehouses and/or using shared facilities operated by 3PLs.
Achieve environmental objectives. Some 3PLs have the expertise to optimize distribution networks and consolidate routes, train drivers to incorporate fuel-efficient behaviors, specify equipment to reduce emissions, and leverage technology to streamline inventory and enhance vehicle performance.
Enhance security. 3PLs have the expertise to help navigate manufacturers through new security regulations and can provide counsel on best practices to improve security policy and procedures. In many cases, 3PLs can manage the implementation of a supply chain security program, from facility and asset security, to security monitoring services and training.
Speed process change. It can sometimes be easier to make process changes with an outside provider, since you can tap into someone else's existing infrastructure, technology and people. This is critical for manufacturers who need to grow at an accelerated pace.
Eliminate hand-offs. Oftentimes, the lines can be blurred between what 3PLs do versus their customers. Manufacturers can benefit from synergies by engaging 3PLs in adjacent processes that take place "before" or "after" what is considered a traditional supply chain activity. When you eliminate hand-offs, you can increase speed to market and reduce costs.
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About the Author
Dave Blanchard
Senior Director of Content
Focus: Supply Chain
Call: (941) 208-4370
Follow on Twitter @SupplyChainDave
During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeek, EHS Today, Material Handling & Logistics, Logistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.