The Impact of Third-party Logistics on Business Operations

The Impact of Third-party Logistics on Business Operations

2022-11-25 11:48:10

1. The impact of third-party logistics on the operating costs of enterprises


For most enterprises, especially production enterprises, the logistics cost occupies a large proportion in the whole production cost. Therefore, the increasing competitiveness makes the production enterprises have to locate customers and reduce inventory.


Reducing production and operation costs is the basic starting point for many companies to choose to outsource their logistics business. On the whole, each logistics solution implies a set of total costs.


The total cost of measuring the enterprise logistics system includes the total cost of transportation, inventory maintenance costs, distribution costs and customer service costs required to manage logistics activities, as well as the logistics costs including accompanying order processing and information transfer costs, and the opportunity cost of losing potential customers.


There is often a relationship of betrayal between these costs. Therefore, when choosing a logistics system, the system must be tested. Starting from the strategic position of logistics in the enterprise, on the basis of considering the logistics capacity of the enterprise, the cost evaluation is carried out and the cost is selected. Minimal logistics system.


The actual results show that the use of third-party logistics will reduce the average cost of enterprises by 11.8%, reduce operating costs by 62%, reduce employees by 50%, and reduce the use of funds for enterprises, and reduce the level of raw materials and product inventory.


2. The impact of third-party logistics on enterprise customer service


The supply of raw materials in the production of the enterprise is related to the normal production and operation of the enterprise. If the purchased materials cannot arrive on time due to logistics problems, it will not only affect the continuity of the production process.


At the same time, it will also face the risk of huge liquidated damages, resulting in damage to the company's own reputation, reduced sales, and even loss of good partners.


Enterprises outsource logistics business to third-party logistics companies, thus forming an equal cooperative relationship, and the behavior of enterprises should be constrained by contracts, reputation and business practices.


Third-party logistics companies can use powerful and convenient information networks to increase order processing capabilities, shorten response time to customer needs, and conduct direct-to-home point-to-point distribution.


This measure will shorten the time period from order to delivery, and achieve rapid delivery of goods, thereby improving customer satisfaction.


Due to the close relationship between third-party logistics (3pl) companies and the customers of the company, their service quality will indirectly become the observation point of the customer's service quality, and realize the company's commitment to the customer's safety and on-time delivery.


Therefore, enterprises should make choices from a long-term strategic perspective when choosing a third-party logistics provider, and should not only focus on their prices.


3. The impact of third-party logistics on the enterprise value chain


The essence of third-party logistics is to coordinate the service requirements of customers and the logistics activities carried out by suppliers, so that high customer service level, low inventory investment and low operating cost can be taken into account and optimized.


Therefore, reducing the operating cost of the enterprise, reducing the occupation of working capital, improving the return on assets and enhancing the competitiveness of the enterprise are the value performance of efficient 3pl.


For an enterprise, the improvement of its value chain depends on the efficient integration of business. If the outsourcing of logistics business is transferred to a third-party logistics provider, its original operation pattern will also change, and the value chain of the enterprise will be improved as a whole.


This is the most important point in the cooperation between enterprises and third-party logistics providers. It can not only improve the financial performance of the enterprise, but also optimize the business process of the enterprise and create value-added services for customers. This is also the third-party logistics. The most important benefit to the business.

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