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Third-party logistics (3PL) is a business method followed by firms to outsource their logistics and supply chain activities to a service provider focused on handling different logistics tasks. 3PL services assist companies in concentrating on their core business activity.
FREMONT, CA: India’s Third-Party Logistics (3PL) market, segmented into transportation 3PL market and cold chain market has seen healthy growth. This surge in the cold chain market is due to development in the e-commerce industry, particularly in the e-retail sector.
Although one of the highest growing markets, the cold chain constitutes a minor proportion to the budding logistics industry of India. The 3PL logistics market is projected to be worth $301.89 billion by 2020. Auditing freight bills and warehousing are now offering logistics-related software that is bringing about greater efficiencies. Additionally, India sees much growth in the manufacturing sector that is also highly significant for the growth of the logistics sector.
To tap the potential opportunity in logistics, Logistics Service Providers (LSPs) ought to implant and develop their ERP (Enterprise Resource Planning). ERP has become significant as there is a growing necessity for technologies to better process efficiency. However, a common predicament faced by key project evaluation teams at leading global LSPs today is whether to modify their existing ERP for their logistics business or to choose a paramount and proven logistics solution that is readily available in the market.
Each approach has its own merits, and a sound way to go about it is to look at the Critical Success Factors (CSFs) that impact the business. In assessing an enterprise’s IT solution, apart from CSFs like implementation timeframes, project cost, and risks related to vendor’s ability, the project manager also requires to consider whether the IT options are aligned with the broader business goals.