Third Party Logistics: The Business Impact Of Third Party Logistics

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The selected business functions that outsource to a third party has become a common practice in the corporate world. The function of logistics is often to outsourced and providing logistics service companies have evolved into providing a vast range of logistics functions including inventory management, transportation services and warehousing services. The companies which provides logistics services on contract to other companies are known as Third Party Logistics Providers ( 3PLs).
The third party logistic is use by the outside company to perform all or part of the firm’s material and distribution of the product. 3PL are the independent providers,they are providing a single or multiple logistics services to a purchasing company. Infact the 3PL does not hold the ownership of the product distribution and they are responsible to perform the activities of the logistics for the purchasing firms. They also have a long-term relationship and commitment between the two parties. A company may outsource its various logistics fuctions to one or more third party logistics alinged with the management strategy to receive benefits of increasing flexibility , reducing costs and for improving
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The Fast Moving Consumer Goods industry ( FMCG ) is one of the most top industries served by the third party logistics. The FMCG firms utilize the services that are provided by 3PL. The impact of Third Party Logistics on FMCG firms are on customer satisfaction, logistics system performance, the impact of 3PL also reduce the capital investment in facilities, reduction in investment in information technology, reduction in man power cost. The third party logistics also impact on the improvement of specific logistics function parameters, and improvement in inventory turnover rates. The 3PL has a positive and negative impact on FMCG
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