What is the Purpose and Significance of Developing the Third Party Logistics?

What is the Purpose and Significance of Developing the Third Party Logistics?

2022-11-25 11:55:02

Ⅰ. The purpose of third party logistics


Third party logistics is a logistics operation and management method. In order to concentrate on improving the main business, production and operation enterprises entrust the logistics activities originally handled by themselves to professional logistics service enterprises in the form of contracts, and at the same time maintain close contact with the logistics enterprises through the information system, so as to achieve logistics activities. It is a logistics operation and management method under the control of whole process management.


Ⅱ. The significance of third party logistics


1. Concentrating on the main business, the enterprise can realize the optimal allocation of resources, concentrate the limited manpower and finance on the core business, carry out key research, develop basic technology, and strive to develop new products to participate in the world competition.


2. Save costs and reduce the capital backlog. Professional third party logistics providers take advantage of the professionalism and cost of large-scale production, save costs by improving the utilization rate of link capacity, and enable enterprises to benefit from the structure of fee separation.


3. Reduce inventory. The enterprise cannot bear the infinite extension of raw materials and inventory, especially the high-value parts should be sent to the assembly spot in time to ensure the minimum amount of inventory. With the help of well-planned logistics plans and timely delivery methods, third party logistics providers maximize inventory, improve the cash flow of enterprises, and realize cost advantages.


4. Improve the corporate image. Third party logistics providers and customers are not competitors, but strategic partners. Providers think about customers and make customers' supply chain management completely transparent through the global information network. Customers can know about supply chain situation through the Internet at any time.


Ⅲ. The value of third party logistics


1. Improve operational efficiency: The improvement of logistics operational efficiency means the development of each individual activity that ultimately forms logistics.


2. Integration of customer operations: Another way to add value to third party logistics services is to introduce multi-customer operations, or to share resources among customers.


3. Horizontal or vertical integration: Through vertical integration, purchase a single logistics function operation or resource with cost and service advantages, and develop a relationship with a single logistics function provider.


4. Develop customer operations: The driving force in value-added activities lies in the customer's own business process, and the added value can be seen as participating in supply chain management and integration.

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