3PL - Third Party Logistics

How better-managed logistics can sweeten the bottom line by offering and charging for services based on use:

All exports of goods, such as the forestry industry, have to keep a special eye on their logistics these days. It depends on how you manage the logistics including transport, storage and documentation throughout the supply chain - these can have a major impact on the whole company, for good or for ill. There is a risk of proliferation, unexpected costs. Last year, for example, total logistics costs for goods actually doubled from the year before. Dow Chemical, for one, was forced in May 2008 to present a 20% price increase across all its products. This volatility costs warrants attention to your logistics and strict control. This in turn requires the right kind of technology. Many shippers in this industry already know that smart logistics technology is no longer a luxury, it's a requirement. 

SEE THE FOREST FROM THE TREES? 

In the forest industry, logistics accounts for a large proportion of the cost of goods sold compared to electronics. Rising costs take a large part of the already MEAGER profit margins. There is increasing pressure from the boardroom down to drive logistics costs and do more with less. In addition, all participants in global trade know it is a skittish horse to ride. The market is always changing, and what's hot today may be stone cold in the morning. The ongoing saga of the wild variety of the dollar and euro values lead to unpredictable demand. Market conditions also drive changes in the capacity of different geographic locations. And then there are the legal tangle: no one is quite sure than the effect will be a dismantling of the ocean liner conferences in Europe this year, for example. With control of logistics operations can make a very lean and nimble in responding to changing circumstances. Ocean transportation contract management software can help shave 5-12% of transportation costs, while track and trace technology provides an open supply chain where we do not need to build expensive inventory to compensate for the uncertainty of whether there is enough product in the right place at the right time.

Unpredictable supply chains tend to lead to poor customer service, which in turn can damage a company's reputation. Customers note late deliveries, unexpected price increases and unreliable information about their transport and when it will. Again, well-chosen logistics management technology can help spread your reputation as a good, reliable product supplier that delivers on time. You can also give customers access to some of your technology, allow-ing them to follow their shipments through your own site. Providers with sophisticated customer-facing services that often command higher prices. Overall, logistics management technology can give a company a competitive advantage.

To achieve the goal

So how do you want to go to achieve this goal? You can ask your internal information technology (IT) department to remedy the problems, and create you a customized logistics system. Unfortunately, this is often very expensive and time consuming. Companies that have tried this method often to spend one million U.S. dollars over several years, just because the system they end up with is already obsolete. In addition, a system built on the house is not necessarily to communicate well with external partners that nevertheless possesses much of the valuable information you need to inject into your system. Another option is to cooperate with the existing logistics companies such as third-party financing logistics providers (3PLs), many offers on-line logistics, including track and trace functions. However, this can drive up the bill, and as a 3PL does not necessarily lead or connect to all your transport providers, can not give you a comprehensive picture of what's happening in your supply chain.

An attractive and accessible solution is to look at logistics technology available on a web-based networks, on-demand. On-demand means that services that sit on an external server, and provided and charged on the basis of how much you use. The network is important because it makes it possible for all of your logistics business to study and feed information about your transport to a central database. In the case of GT Nexus, for example, all of the world's largest ocean liner companies are already connected, and they feed the data in the system already is standardized so that it can be used in a variety of ways.

On-demand logistics management technology offers a cheap solution. There is no reason to buy software licenses, or build and maintain an expensive data-management system. It has already been built, and can be rented rather than buying. It is also a good alternative in the long term, which to buy and maintain their own systems is a serious advance financial commitment to a technology provider, which may disappear, cutting off access to major upgrades and patches. With OnDemand is up-front payment is minimal, and a company that can scale up or down depending on changing needs. Nor is it necessary to wait several years before the system is available. A connection to an on-demand network live in 60 days. In addition, access to a vast network of logistics can benefit the whole company. Data in a logistics network management are important for other departments - sales, marketing, customer service and economy. External access to this information from your business partner makes it easier to work with you.