Inventory management is very crucial for developing a robust supply chain. If any business is looking to scale up its operations, then a robust and efficient supply chain is like a backbone for the business. But if you are a small scale or medium size business, then you may not have enough resources to run a dedicated division to manage the inventory as available with the big companies. In this case Third Partly Logistics or 3Pl Inventory Management may be a good option.

What is 3PL?

The full form of 3PL is third party logistics. Third party logistics is a company which provides solutions for businesses to manage their logistics, warehousing, inventory management, delivery and order fulfilment. All these processes can be outsourced by businesses to 3PL companies and the 3PL company will manage all these processes on behalf of the business. The advantage of hiring 3PL is that you don’t have to invest capital to hire manpower and other resources to manage you supply chain and logistics and you can rely on 3PL companies for this without spending too much money on it.

What is a 3PL Inventory Management?

Management of inventory is crucial for the efficiency of the supply chain. If the inventory gets sold it is converted into revenue but when its sits idle, it attracts expenses in the form of overhead costs, maintenance costs, wastage, theft, pilferage, etc. Therefore, it is crucial for the businesses to manage their inventory efficiently and effectively. This is where the 3PL Inventory Management agencies can pay a crucial role. 3PL inventory management companies manage all your inventory for your business. These companies help the businesses identify the demand of products and how much quantity of a product to be ordered. These companies manage the inventory from the date of purchase to the date of sale of the products. 3PL companies also provide the businesses with a digital inventory management system so that you can monitor your inventories online. The businesses can thus make an informed decision based on the data, analytics and other crucial analysis.

Reasons Why the Companies opt for 3PL Inventory Management Services

It is crucial to know if a business really need a 3PL inventory management service. Some of the reasons why the companies go for 3PL management services are as follows:

• The time, effort, money and other resources to be invested in the inventory management are really high.
• If the company is small enterprise and cannot spend much money in managing the inventory it may choose 3PL inventory management services.
• When the companies want to scale up their businesses without investing too much in the inventory management system.
• If a company want to have access to the online inventory management system and software data to make a more informed decision.
• When the company want to focus on growth rather than diverting its resources to the operations, then engaging a 3PL inventory management company is appropriate.

Benefits of 3PL Inventory Management Services

There are numerous benefits of 3PL management system some of which are listed below:

Better Monitoring of the Stocks

There is better management of stocks with the help of 3PL management services as you can have easy access to all the real time data and inventory management system which is being maintained by the third party. You can rely on the competency and specialization of the third party inventory management company and always monitor the stock regardless of where you are. This help you efficiently manage your inventory.

Effective Management of Inventory without Spending Too Much Money

Small companies do not have enough resources and money to spend on the inventory management. Many times they even do not have enough expertise and specialization to manage their supply chain. In this scenario, engaging a 3PL inventory management company is very helpful as the 3PL partner can manage the whole inventory on behalf of the company by charging a small amount and the company may focus on the operation or other areas by engaging its resources on these functions.

Efficient Distribution Network

If you have a distribution network spread on a wide area or across the country, then you can make it efficient as the 3PL inventory management company have the expertise in this field, will manage it for you. You can scale up your distribution network with the help of 3PL inventory management company and operate your network spread in multiple cities by sitting at headquarter.

Conclusion

In today’s challenging business environment, having an efficient inventory management system is a competitive advantage for any business. It takes too much effort, resources, expertise and finance to manage the inventory of a company and this is where the 3PL Inventory Management company can really help a business. You may be enabled to monitor and manage your inventory with the help of a 3PL partner by paying a small amount and you can divert your focus and resources to scale up your business, without having worry of your inventory. The crucial part is to discover if you really need to outsource management of your inventory to a 3PL inventory management company.

Read more: Web 3.0 and its role in the Supply Chain Management