Justify: Logistics = Supply + Material Management + Distribution Why a large scale steel manufacturing company should use third party logistics (3PL)?

Logistics = Supply + Material Management + Distribution. This is so because the purpose of logistics is to make the product available to the customer at the right place and at the right time. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible. Logistics is concerned with the proper movement of materials from the source of supply to the place of production and the movement of finished product from the factory to the customer. Third-party logistics (3PL) refers to outsourcing transportation, warehousing and other logistics related activities that were originally performed in-house to a 3PL service provider. A large scale steel manufacturing company should use third party logistics (3PL) for the following advantages: The company can focus on its core business operations. The company can gain immediate access to intelligent IT infrastructure. The company need not invest or block funds in facilities like warehouses, trans-shipment centers or equipment vehicles etc. To reduce costs/expenses as costs are based on the transported volumes and distances by 3PL service providers. To gain the advantage of economies of scale. To get the flexibility in market penetration.