Common used phrases in logistics.
As the name suggests, this means to fulfil an order for a customer. This may involve picking stock from storage, packaging, labelling and dispatching to the end customer. This type of logistic handling is mostly employed by e-commerce and catalogue businesses that have different single items being picked and shipped-off at the same time.
Pick pack service is one of the key offerings any warehousing company has to make. It entails taking the ordered products out of the stored stock, and repackaging it to be delivered on the intended destination. It is considered as the most crucial part of the order fulfilment process. Commonly used in retail distribution for the replenishment of stock.
Third-Party Logistics (3PL)
Council of Supply Chain Management Professionals, 3PL is defined as "a firm that provides multiple logistics services for use by customers”. Third Party logistics (3PL) includes outsourcing of any function of logistics to an external organization –which may include handing over warehousing or transportation services. Large companies are more likely to outsource their logistic activities to reduce burden, and accelerate the distribution process.
Similar to the third party logistics definition, this term refers to only outsourcing the warehousing function. Where a third party company manages the receipt, storage and order fulfilment to your customers.
Contract logistics are specialised companies that provide contract-based logistic services to those companies who want their logistic operations managed. Contract logistics is responsible for designing and planning supply chains, warehousing, processing orders, managing payments, and sometimes managing your customer service activities. Providers of contract logistics are frequently called 3pl’s or 4pls.
When stock is transferred from a supplier/manufacturing plant directly to a customer. Typically involves minimum storage and handling. Commonly used in retail logistics for new seasonal drops, where stock is manufactured, shipped and sent directly to stores.
In sourcing means that a company is self-sufficient in its supply chain needs, and doesn’t need any external party to manage any of its operations. Most companies prefer to have their own regulatory systems, and choose to maintain their own warehouses and supply chain systems. May involve embedding outsource contractors into their own network.
Lead Logistic Provider
Lead Logistic Providers (LLP) are there to manage and improve your supply chain systems by suggesting necessary changes in your strategy. They devise new strategies for your organization to meet changing demands, and bring your company on par with the ongoing trends that will maximize efficiency and reduce cost. Working in the administration and consulting areas, they manage multiple individual logistics providers (3pls) and usually provide a standard interface to the client. Also, referred to commonly as fourth party logistics (4PL).