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3PL companies require flexibility and understanding of logistic processes
The traditional service providers are the transport companies, which later added storage and shipment services to their portfolio. They became real 3PL (third party logistics) companies when they started to offer Value Added Logistics (VAL, such as inventory management, customs clearance, quality control and re-packaging. In fact, they were going to act as supply administrators for third parties.
The use of technological applications increased strongly. Just think navigation systems, on-board computers and a bit later Transportation Management Systems (TMS), Warehouse Management Systems (WMS) and Enterprise Resource Planning (ERP). The scale of their services increased, but so did competitive pressure. It was also not helpful that many companies are considering insourcing again. The shortening of the supply chain through online sales has made that possible.
For a logistics provider is absolutely essential that the logistics system offers both optimum performance and maximum reliability. Because both clients and handled product can constantly change, concepts like flexibility and scalability tend to be crucial in designing the logistics system. In addition to these requirements, the 3PL company must constantly keep a good overview on the stock levels and order processing to be able to invoice accurately. Moreover, the activity must be reported in a transparent way to the customer.
Depending on the service provider, we see in this industry often a mix of automated systems, traditional storage methods and the use of clever tools such as voice picking or pick-to-light technology to cope with the ever changing situation.