GTS Blog

The Benefits of Inventory Management with a Third Party Logistics Partner

Posted by Ascent Global Logistics on Mar 28, 2017 12:13:39 PM


Whether it’s your raw materials or finished goods, inventory is the largest asset for any business. It requires a lot of focused attention for perfect order fulfillment for an ultimate improved bottom line.  From sourcing and manufacturing schedules to transportation and warehousing, all these and more depend on the inventory levels in the supply chain. Therefore, controlling your inventory through the supply chain is very important.

You want to meet all customer requirements with the lowest possible demand since sitting inventory is not making you money. So, the less needed the better right? But what happens when demand fluctuates due to seasonality or other factors and causes lower order fulfillment rates or stock outs?

Most manufacturers are often unable to create flexible supply chains (ones that can respond to fluctuations in a forecast) due to the inability to acquire and/or maintain the core skill sets and technology needed.  This is where a Third Party Logistics or 3PL can assist in inventory and supply chain management. Whether it’s inbound, outbound, or drop ship, 3PL’s are able to manage and provide end-to-end visibility of your supply chain with prioritizing and scheduling tools, creating a cost effective solutions. 

How you may ask?

3PL’s have the resources along with the best practices to manage inventory levels throughout your supply chain  since this is something they do day in and day out. They will help you optimize your network of manufacturing and distribution points to ensure efficient and cost effective shipping. 3Pl’s also have fundamentals of inventory control from their experience across many industries. By handling your freight from end-to-end, this allows for seamless visibility of inventory, which can help you make informed decisions.

 Most 3PL’s also have the technology to interface with the tools used to manage day-to-day inventory planning and rebalancing through three main areas.  The first is network planning technology which considers such factors as transportation and inventory costs and shipper and customer locations to create the best network on tradeoffs of inventory.  Next is managing inventory when it reaches the warehouse. WMS (Warehouse Management Software), allows for accurate inventory counts.  The last main area is inventory planning technology. This technology uses algorithms to analyze customer order data to determine the appropriate levels of inventory to maintain at each location.

Being able to predict and control inventory can be a challenge but is imperative for a logistics manager. Although not all 3PL service providers have the expertise or technology, one that does can prove to be a big asset for handling your business.


Interested in learning more about 3PL’s? Give GTS a try! Start building your custom solution today to see your cost savings opportunities.

Topics: Supply Chain, Manufacturing