Third Party Logistics and Inventory Management

As a quick refresher, Inventory Management can be defined as:

A process in which a retailer, or manufacturer seeks to acquire and maintain a proper product assortment while ordering, shipping, handling, and related costs are kept in check. (Prentice Hall)

This is and will always be the challenge of managing your company’s supply chain. How do you balance between efficiently getting products to your customers and running the increasingly important holy grail of logistics; “ the lean supply chain?”

Herein lies the challenge that companies try to overcome every day, month and year. Controlling stock levels in the warehouse to reach an equilibrium between the need for product availability and the need for minimizing stock holding, handling, ordering, and shipping costs.

If your company’s operations group is finding it increasingly difficult to maintain this balance it may be of interest to explore the option of outsourcing the management of your company’s inventory to a third party logistics provider.

A 3PL can quickly have you up and running with the systems and processes to help you identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status.

Using techniques such as ABC analysis, lot tracking, cycle counting and using the latest in inventory management technologies, third party logistics companies provide clients with a strong visibility of their supply chain enabling them to more effectively find a good balance.

If your company already has an exceptional operations group to maintain this balance then maybe a 3PL may not be the answer. But it is always good to keep your options open and never stop exploring the new opportunities and technologies that are emerging in the logistics industry.