Tag: trucking

Difference Between 3PL vs 4 PL Logistics

We are used to 3PL (third-party) logistic but where does fourth-party logistics come into the picture? 3PL and 4PL are indeed different and offer different levels of logistical services. Sometimes the decision to choose 3PL or 4PL Logistics gets really tough, understanding the differences between them and utilizing the differences to our use and making the best efficiency and cost-effective supply chain to our business is of great importance.

What is 4PL?

Fourth Party Logistics, also known as lead logistic providers or 4PL, they assume many of the similar roles as third-party logistics providers but have much more responsibilities and accountability in helping the customers to reach their strategic goals.

Fourth Party logistics providers provide additional services than 3PL and even manage external 3PLs to design, build, and provide a supply chain for the business.

4PL services typically circumscribe 3PL services as well such as:

1. Strategy for logistics
2. Change in management
3. Managing project
4. Inventory planning and management
5. Outbound, Inbound and reverse logistics managements
6. Planning the business
7. Network design
8. Network Analysis
9. Analytics including transportation spend, analysis, capacity utilization, and career performance.

Pros of 4PL

1. It gives you more ownership and control over your business.
2. Creates a slope and cost-effective supply chain for improved profit margin.
3. It provides additional outsourcing to third-party professionals by letting manufacturers focus only on their product.

Cons of 4PL

1. Minimal control over logistics processes and fulfillment.
2. Cost-prohibitive for startups and small businesses.

What is 3PL?

Third-Party Logistics is outsourcing all or much of a company’s logistics operation to a specialized company. 3PL allows you to focus on various other parts of your business as it allows you to expand operational logistics from warehousing. Third-Party logistics services can make up part or sometimes all of their supply chains, including:

1. Cross-Docking
2. Inventory Discovery
3. Order Fulfilment
4. Returns
5. Order tracking
6. Technical services/IT solutions
7. Freight forwarding
8. Shipping/Distribution

Pros of 3PL

1. A vast network of resources across countries, the company can also expand its market outside the country and manage internationalization.
2. 3PL works well for business which is growing at a faster rate and for large order volumes.
3.Finding the right 3PL can save you a lot of time and money.

Cons of 3PL

1. It can be challenging if the customer doesn’t get the product on time. The customer will ask a question from you and no one will blame the 3PL party.
2. Products are not in easy reach of 3PL.
3. Large cost for investment at the beginning, and if you don’t need a big warehouse or you do not have many orders, the cost of 3PL can be prohibitive.

3PL vs 4PL — What’s best for your Company?

As third party logistics and fourth-party logistics operate in a similar manner but consists of different parts. A 3PL company arranges carries and warehousing by directly dealing with the service providers, where the 4PL company arranges the same services and does a lot more for a client by employing companies for the clients such as employing 3PL companies who use their vast network of carriers and warehousing providers. 4PL companies manage other companies to provide a client with a comprehensive end-to-end supply.
If you are constantly dealing with an increasingly complex supply chain and struggling to meet the expectation of your trusted customers for faster reasons, then an innovative 3PL or 4PL may be the best solution for you.

Key Stages of Order Fulfillment Process

Order fulfillment is an important part of the supply chain process. It is the process of receiving, processing, and shipping orders to the end customers. It’s possible to handle fulfillment in-house or outsourcing it to a third party logistics company that handles the process for you.
To maintain quality control and maximize profit as much as possible, many smaller operations opt to handle their own order fulfillment process. But if you want to focus more on the main fields of activity, and work more efficiently and productively, opting third-party logistics is the best solution. The order fulfillment process varies according to the type of business, inventory management, and supplier selection and can become highly complex. Here are mentioned the key stages of the order fulfillment process:

Receiving Stage

When you receive inventory from suppliers and manufacturers at your warehouse. the next steps will be:

1. Count all the items which you have ordered.
2. Check to make sure no items have been damaged during shipment.
3. Add the record of new inventory to your warehouse management software to keep the count, sales numbers for each item and also to track the location of items.
4. Add SKUs/barcodes to every item you received if they aren’t already labeled correctly.
5. Place individual items into ready-to-deliver kit packages, if necessary.

After following all these steps carefully, the next stage is to shelve it in the warehouse. By properly storing the items in the warehouse, you can maximize the speed and accuracy of your order fulfillment process thus can increase warehouse productivity.
Store each SKU in its own box, with overflow stored in another area of the warehouse. Keep SKUs that sell most often in boxes closer to the packing stations for easier access.

Processing Phase

The order processing phase starts when an order is received from the customer. Typically, fulfillment software integrates with shopping cart software so that when someone places an order online, the order is automatically sent to your fulfillment software at your warehouse, too.
After receiving the order, items are picked by staff and taken to an order packing area. In the packing area, firstly the items are checked for quality and packaged with the best materials appropriate for the items. Packing slips and other information are added, then the box is sealed and moved to the shipping station.

Delivery Phase

Once the order is in the shipping station, it’s ready for delivery to the end customer. In the shipping station, the package is weighed and the best delivery method is selected. Once the package is ready to deliver, the shipping station will update the status of an order to make sure customers can track their orders until they are delivered. After the order has been delivered to the customer, it can be considered fulfilled.

Choose Tenaxx Logistics for Your Order Fulfillment Services?

Want to find out more about our order fulfillment services? Contact Tenaxx Logistics today by filling out our online form or call us at 519-260-2738 and let us know what your business requirement. We’ll talk to you about possible shipping requirements and give you an accurate estimate for the services you need.