Image Credit University of Nebraska Omaha
Logistics is the crucial physical link of the supply chain through which the materials flow from the supplier to manufacturer and from the manufacturer to customer.
The material flows from supplier to the manufacturer are referred to Inbound Logistics and from manufacturer to customer as Outbound Logistics.
3PL – Third party logistics providers:
Increasing levels of outsourcing, its global scope and competitive pressures of global markets have placed heavy demands in terms of speed and reliability on the logistics operations both on inbound and outbound sides. Worldwide, companies have been focusing on their core competencies and outsourcing the logistics operations. This has led to growth of specialized third party logistics providers (3PL) providing total integrated logistics solutions.
Traditionally, logistics services in India have been provided by a diverse group of Freight Forwarders, Shipping Agents, Consolidators, Customs Clearing Agents, Warehousing Companies and transporters while the coordination and integration between them was done by the client companies. But in line with global trends, 3PL service providers have started emerging in India also and client companies have increasingly started utilizing their services. This results overall economies to the client company’s assurance of their better service levels.
Advent of e-commerce has added a new dimension to logistics and given rise to a new term e- fulfillment. Initial success of B2C dotcom ventures like Amazon in increasing sales exposed their weakness in physical delivery or fulfilment. This has thrown new challenges for the existing logistics players and opportunities for the new intermediaries, which are much higher in B2B environment.
B2B marketplaces evolved incorporating additional functionalities for pass-through supply chain channels, collaboration and customization. E-fulfillment includes activities like order management, customer service, procurement and inventory management, warehousing and shipping, processing and disposition of returns. B2B environment has many types of buyer-seller relationships and channels like mutual partnership, e-procurement, agents and distributors, direct channel, exchanges and auctions and digital transaction hubs.