When you hear about a big company, such as Amazon or Johnson & Johnson, all you can think about is how difficult it must be to manage such a big supply chain business. We often wonder how are they managing their transportation, stock management, and other elements so systematically. The answer is—through effective and efficient warehousing and 3PL (third-party logistics) services. Any big company needs a warehouse and logistics service providers to manage its supply chain.
Warehousing is the process of safely storing goods within a building that is called a warehouse. It is a place where goods are received, stored, and later sent for distribution before getting sold.
Logistics, on the other hand, involve transportation, inventory, packaging, door to door delivery, etc. Overall, it is the management of the flow of goods from one place to another. There are two types of logistics—Forward logistics and Reverse logistics.Â
Types of logistics services
Procurement: This service offered by 3PL providers involves ordering and receiving goods from other places in the supply chain.
Order fulfillment: This is a very important service as it has a direct impact on customer satisfaction. Order fulfillment is receiving orders from clients, packaging them, and sending them out for delivery at the right time. A 3PL provider ensures that the product reaches on time, in good quality and condition.
Transportation: One of the main logistics services providers is transportation that focuses on the safe movement of goods from one place to the other. It also overlooks the on-time delivery of goods.
Value-added services: These days, 3PL providers are not only limited to managing warehousing and inventory but also extend their services to product life cycle management, repacking, sub-assemblies, among other value-added services. 3PL providers use the latest and advanced technologies like Warehouse Management Systems (WMS) and Systems Applications and Products (SAP) software.
Consolidation: Freight or sometimes known as cargo consolidation, is one of the key services offered by 3PL providers. This is the process of clubbing small packages into one big package. Due to this, the shipping cost is reduced drastically. This process usually takes place when orders to a particular location are large in numbers.
Warehouse management systems (WMS) –
A Warehouse management system is a software that has been particularly designed to control and manage warehouse operations. A WMS is used by organizations for administering all warehouse operations from the time the goods are received by the warehouse until they are out for distribution or sale.
The key purpose of a warehouse management system is to make sure that the movement and flow of goods take place in the most budget-friendly and effective manner. From inventory tracking, picking, receiving, and sending out, a WMS takes care of all functions that enable their flow.
Key benefits of the warehouse management system:
- More visibility
- Faster operations
- More accuracy
- Smooth Processing
- Improved efficiency
What are key warehousing services?
Cross Docking: This service enables clients to route goods from one or many manufacturing sites to a particular distribution center. These centers are mostly located in a region that is closer to the customers.
Order Fulfilment: Order Fulfilment is a service that is also offered by a company that runs a warehouse. It involves order processing, packaging and labelling, and shipment. This reduces operational costs.
Protection of goods: A proper storage facility such as with temperature control devices, etc. to ensure that the quality of goods is not compromised.
Are these services you see yourself or your organisation Implementing? If so, you can get to know more about them in the following segments.
AAJ Supply Chain Management
