Question:3PL providers sound a lot better than private warehouse. Yet, why is it that some companies still insist in building their own private warehouse?
Answer:
Although the 3pls sound better than private warehouse,the company have to pay money for all the service that mean when the company store or acquire the service more,they have to pay more.
However some companies such as manufacturing or chain stores that need to store a lot of equipment, prefer to use private warehouse because they can reduce the expense in long term although the start up cost is high which can lead to low profit even lost in short term.
Sunday, January 18, 2009
Question posted by Eepeng"Using 3pls have more flexibility.Can u explain?"
Answer: Using 3pls providers is more flexibility because the company can change the provider easily if they don't like the storage system,customer services that the service firm provides.
Unlike the private warehouse,the company does not need any preparation in order to store the products that special treatment because although the company's long term 3pl partner cannot accept those products, they can find the another 3pl providers that can accept the products
Unlike the private warehouse,the company does not need any preparation in order to store the products that special treatment because although the company's long term 3pl partner cannot accept those products, they can find the another 3pl providers that can accept the products
Friday, January 16, 2009
Highlight
Usefulness of topic in DCM
-As the warehouse in fully control by the company, the company can use warehouse as Distribution Centre.
-As 3pls are already established in the logistics industry, the company can use them as Distribution Centre.
Constraints of topic in DCM
-There will be cost a lot and time consuming as the warehouse must change layout and design to be Distribution Centre.
-Using 3Pl companies as distribution Centre is fine but the company must do alot of research to make sure that that 3pls company is reliable.
-As the warehouse in fully control by the company, the company can use warehouse as Distribution Centre.
-As 3pls are already established in the logistics industry, the company can use them as Distribution Centre.
Constraints of topic in DCM
-There will be cost a lot and time consuming as the warehouse must change layout and design to be Distribution Centre.
-Using 3Pl companies as distribution Centre is fine but the company must do alot of research to make sure that that 3pls company is reliable.
Evaluate between private warehouse and 3rd party logistics services providers
To evaluate between private warehouse and 3rd party logistics services providers
Private Warehouse only performs as the storage for the goods but involve in the shipping of goods. Moreover, the start up cost is very high. However, the company do not have to pay for storage fees which mean that the companies such as manufacturing companies or chain stores, that handle large volume of a regular basis and one of their resulting economics of scales comes from integrating the warehousing function with purchasing and distribution to retail outlets, are suitable for it as in long term it will reduce a lot of cost.With more control, there is greater flexibility of designing and operating the warehouse to suit the needs of its customers and the characteristics of the products. This means that companies who have specialized handling for its products will not find public warehousing viable. In addition, the warehouse can also be modified through expansion or renovation to facilitate product changes, which is not possible on a public warehouse.
Third party logistics service providers are the service provider integrates more than one function within the overall supply chain but the service can be as narrow or broad as needed. In essence, 3PL providers sell three commodities: labour, space, and time. As for the company that do not need to store a lot of good can rely on them as they not only store the goods but also pack the goods and then deliver to the customer. However, sometimes when the goods are damaged, it would be difficult to blame on them because some 3PLs are not responsible for the damage of goods. So the company have made it clear before make a contract with them. Moreover, different customer service will cost the company different charges, i.e. the more services, the higher the charge. Furthermore, we cannot say that the warehouse of 3pls, which is also called public warehouse, can store all of our goods because there will be space limitation or the warehouse manager believes the goods can damage the other goods.
Private Warehouse only performs as the storage for the goods but involve in the shipping of goods. Moreover, the start up cost is very high. However, the company do not have to pay for storage fees which mean that the companies such as manufacturing companies or chain stores, that handle large volume of a regular basis and one of their resulting economics of scales comes from integrating the warehousing function with purchasing and distribution to retail outlets, are suitable for it as in long term it will reduce a lot of cost.With more control, there is greater flexibility of designing and operating the warehouse to suit the needs of its customers and the characteristics of the products. This means that companies who have specialized handling for its products will not find public warehousing viable. In addition, the warehouse can also be modified through expansion or renovation to facilitate product changes, which is not possible on a public warehouse.
Third party logistics service providers are the service provider integrates more than one function within the overall supply chain but the service can be as narrow or broad as needed. In essence, 3PL providers sell three commodities: labour, space, and time. As for the company that do not need to store a lot of good can rely on them as they not only store the goods but also pack the goods and then deliver to the customer. However, sometimes when the goods are damaged, it would be difficult to blame on them because some 3PLs are not responsible for the damage of goods. So the company have made it clear before make a contract with them. Moreover, different customer service will cost the company different charges, i.e. the more services, the higher the charge. Furthermore, we cannot say that the warehouse of 3pls, which is also called public warehouse, can store all of our goods because there will be space limitation or the warehouse manager believes the goods can damage the other goods.
About 3rd party logistics service provider
What is Third Party Logistics service provider?
Third party logistics service provider means outsourcing logistics activities including transportation and warehousing to outside firms. For example inbound freight, customs and freight consolidation, public warehousing, contract warehousing, order fulfilment, distribution and management of outbound freight to the customers. So, it can be said that unlike the warehousing which provide only storage space, third party logistics provider have wide range of services.
Third party logistics service provider means outsourcing logistics activities including transportation and warehousing to outside firms. For example inbound freight, customs and freight consolidation, public warehousing, contract warehousing, order fulfilment, distribution and management of outbound freight to the customers. So, it can be said that unlike the warehousing which provide only storage space, third party logistics provider have wide range of services.
Advantage of third party service provider
-Increase net profit through reduce costs-as the company have to pay some expenses such as labour cost and maintenance cost, it can earn much profit.
-Reduce financial risk-As investment in logistics assets such warehouse need large amount of money which can lead to financial risk
-Flexibility
-Increase net profit through reduce costs-as the company have to pay some expenses such as labour cost and maintenance cost, it can earn much profit.
-Reduce financial risk-As investment in logistics assets such warehouse need large amount of money which can lead to financial risk
-Flexibility
Disadvantage of third party service provider
-It is difficult to find reliable partner
-Damage to the goods-as the goods are stored with the other products, we cannot say the other product cannot damage our product.
-Different customer service level
-It is difficult to find reliable partner
-Damage to the goods-as the goods are stored with the other products, we cannot say the other product cannot damage our product.
-Different customer service level
About private warehouse
What is Private Warehouse? Private warehouse are owned by the company they are being used and Operated as a department in the company. They are mainly used by manufacturing companies because these companies need a lot of things to store such as raw material, semi-finished goods, finished goods and spare parts for the manufacturing machines. Moreover, they are used to store the dangerous products steel gasoline which some public warehouse prefer not to handle.
Advantages and of private warehouse
-Can store more equipment- as the company own the warehouse it can store everything until the warehouse is full.
-Do not need to pay rental fees
-Full control over warehousing operation
-Can store more equipment- as the company own the warehouse it can store everything until the warehouse is full.
-Do not need to pay rental fees
-Full control over warehousing operation
Disadvantages of private warehouse
-High start-up cost-the company have to use a lot of money in building the warehouse.
-High maintenance cost-when the warehouse is repaired or upgraded the company have to pay all the cost.
-High labour cost-the company have to hire more labour to manage the warehouse operation
-High start-up cost-the company have to use a lot of money in building the warehouse.
-High maintenance cost-when the warehouse is repaired or upgraded the company have to pay all the cost.
-High labour cost-the company have to hire more labour to manage the warehouse operation
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