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Pro and Cons of Third Party Logistics

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By BHL Solutions

Meeting customer delivery demand should be the priority of any service or product company. Its shipping and fulfilment operations have to be tailored to convenience to suit the customer time and preferences. And this is why third party logistics comes in, to aid businesses in achieving customers’ delivery demands.

What is third party logistics?

Third party logistics (3PL) is a type of an outsourcing business which supports some or all aspects of a business’ shipping operations, the management and movement of their goods from manufacturers and distributors to end consumers. When a company outsources its shipping and fulfillment services, the services expected include:

  • Transportation
  • Warehousing
  • Inventory management
  • Customs brokerage
  • Freight audit
  • Payment
  • Shipping tracking

In short, third party logistics is an outsourcing service where your operational logistics from warehousing to delivery is being managed to save you time and fulfill customer delivery demands daily.

Functions of 3PL 

Warehousing is a type of third party logistics service provider that is integrated into a business warehouse and transportation procedures. It involves specialized storing and distributing of the goods. It is usually customized to handle storage, distribution, and product transportation.

Distribution: Distribution of large quantities of product can be a bit overwhelming, especially for small businesses. So, by outsourcing your distribution service to a third party logistics, you minimize your task and draw focus on other business core competencies. The services would include outbound order fulfillment, picking and packing, custom labeling, and manufacturing.

Shipping:  With a third party logistics, your shipping processes would be managed from start to finish, which  include management of carrier relations, and freight data and matrix reports for real-time visibility and increased transparency throughout the shipping process.

Transportation: When a company leverages on a third party logistics, what they expect is for the 3pl service provider to manage the inventory shipment between the company and its buyers. 

Pros 

Third party logistics has been designed to help businesses optimize their logistics operations. Whether a business owner or as an individual, here is how you can benefit from the services of a third party logistics.

It saves you cost:  Utilizing the warehouse services of a third party logistics saves you the cost of having to maintain your own warehouse and staff. You can now save money instead of spending it on stock levels and inventory storage fees.

Unlimited Access to Experts: A third party logistics company has a core specialization in certain areas of logistics, that’s to say expertise knowledge in those areas you might have no idea about. These areas often come with its own challenges, so by having an expert handle your logistics functions, you can have time to increase your business value. 

Simplified International Logistics: Third party logistics works for you when you sell products across countries whether between two or three countries, or if you are in the category of expanding your business internationally. Third party logistics companies handle the custom, documentation, and other international duties which may delay shipment. 

Cons

Everything has a disadvantage; here are some disadvantages of third party logistics:

No control of over delivery process:

Delivery is the most sensitive part of business, and issues arise during shipment, and are however impossible to get by, if you used a third party logistics company. And this will probably lead to series of back and forth, which would waste your company’s resources.

The initial cost of hiring a third party logistics company is high: At first, the cost of using a third party logistics company is expensive, and may have an effect on turnover. If your business doesn’t require substantial storage area, or have many orders, using a 3pl can weigh down on your business.

You can no longer monitor the quality of your products: This can be inconvenient if you have any quality control issues, or feel like you need to physically inspect your inventory for some reason.


Perspectives from BHL Solutions.

When UNN Was MIT of Africa on Inventions and Innovations

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Reading some comments on the UNN electric car, I felt really bad. Simply, there are people in Nigeria that would not believe Nigeria and its technical professionals even when there is indisputable evidence that Nigerians have never lacked capabilities. Our problem remains the absence of enabling environments (my Owerri office uses the national grid as a second backup). I did not study mechanical engineering but from the little motor vehicle technology workshop I did in secondary school, I have this confident that Nigerian universities can build an electric car.

University of Nigeria Nsukka (UNN) has created Nigeria’s first electric car. Yes, the Nigerian version of Tesla. It is called Lion Ozumba 551. UNN graduates are Lions and the Vice Chancellor under which the show ran is named Ozumba. Building a prototype which can be tested for five minutes is different from having a product in the market. Yes, they can build a prototype which I think is not really a big deal.

UNN Makes Nigeriaâ??s Tesla Electric Car: Lion Ozumba 551 (Photos)
UNN Electric Car

Yes, UNN built electric car. OAU Ile Ife, UI, UNIPort, etc had also done their own things. Covenant University does many great things regularly. I was in Usman Danfodio University few years ago; I met people doing great things. Yet, the citizens will not believe.

The national contract is broken because there is severe lack of trust in the nation. This is very unfortunate. INEC, our electoral umpire, believes that our professors are trustworthy – the very reason they are called to coordinate the most critical elements in our national democracy. Yes, university vice chancellors are now exclusively put in positions to drive elections across states. If you cannot trust the vice chancellors, who would you trust in Nigeria, INEC reasons?

To our young people, I do not know the books you read these days. But when I was growing up, I read about Nigerian inventors and makers. Mathematical Chike Obi was like a little god no one could see. Then, the day we met him – Prof Augustine Njoku-Obi; his son married from my clan. He may not sound a name. But he could have been the father of cholera vaccine in the world. He was the man that invented the cholera vaccine that stopped the Kano Cholera outbreak in 1972. The World Health Organization (WHO) approved the vaccine in 1971 and when the outbreak came in Kano, Nigeria deployed the vaccine. That was actually one of the finest moments of the post-war healing process – an easterner created a vaccine to save lives in Kano when few months ago they were killing themselves!

UNN was like MIT of its African era, leading in engineering, medicine and practically any field you could imagine in Africa. Of course, UNN went on lost decades as the military took over and underfunded research in the nation’s namesake university. But who knows ,this electric car could be a positive sign that the Lion is roaring back from slumber!

Yet, UNN should not over-celebrate this. In 1968 during the Biafra War, UNN students and professors produced military-grade vehicles and one of the most sophisticated indigenous bombs in modern Africa (Ogbunigwe). In Okigwe, they built a refinery to refine crude oil when all the axes were closed. So, UNN should chill, this is not a big deal when you look at the history of UNN. Nigeria had done all these things more than 50 years ago and used in warfare.

Comment on LinkedIn Feed

Sir! The vaccine was something tangible. I personally don’t see the electric vehicle as a tangible creation. There must be a reason why theirs is different and better than previously invented electrical vehicles. I believe what they’ve done; is to couple things together, so that it works. Merely what a technician also would have done. We shouldn’t be hyping mediocrity. It could have given their students more practical knowledge though. I stand to be proven wrong though.

My Response: Glory – in this world, nothing is really new. In your Toyota, there may be more than 100 suppliers from different vendors. If you have iPhone, 90% of the components inside it are not made by Apple. Our problem in Nigeria is that we set bars to ourselves that we cannot set for others. In U.S., my Church dedicated a Sunday congratulating kids that finished secondary school. They thanked them, gave them gifts, and printed their bios for all to read. But in Nigeria, who cares?

If UNN said it made a car, and NASENI said it made a car, there is nothing you wrote that is off point. The right thing is to challenge them to take it to market.

I want young people to be “crazy” in trying things. There is nothing in your comment that shows you know what they did but you defaulted that it has no value. That is the problem for Nigeria. You “believe” but you are not sure. Yet, you believed.

I am not defending UNN, OAU, ABU or FUTO. But I hope in NG, we change. UNN had built military cars 50 years go as I had noted. Visit Umuahia – the civil war museum – tomorrow. They have built refineries. They have created things. They invented vaccines 50 years ago. But today, no one can believe it. That is unfortunate.

Streaming Music Firms (Apple Music, Spotify) Deploy Double Play Strategy with Live Events

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There is a minor irony in the streaming music industry: the big players are investing heavily on live events to actually get people to return to phones and computers to stream contents. So, right there in Africa, if you plan to open a streaming music website without plans to get musicians on live events, you are missing the other element that makes the double play strategy successful. The business is streaming but the boost is now live events. That explains why all the major Nigerian musicians are basically on constant tours around the world. Apple just hired one (Burna Boy) for Apple Music Up Next Artist, and he will be on live concerts to do one thing: get people to subscribe to Apple Music service.

When Taylor Swift takes the stage Wednesday night in New York City, only around 2,000 fans will be on hand to see the concert in person, but millions more are expected to watch live online via Amazon.com Inc.’s Prime Day promotion.

Music-streaming services including Apple Music and Spotify are counting on live events to set themselves apart from one another, further connect fans with artists and keep their subscription payments flowing. They have been experimenting with concerts based on popular playlists, album-listening…

Simply, the business is not just streaming music but also doing live events to activate streaming subscriptions. That happens not by focusing on the few users who are live but those watching and connecting from around the world through the web. As you see the artist performs “live” – digitally or physically – you may be moved to keep that subscription going because there would be more concerts in future. The live concert is now the double play in the streaming music industry.

The Sneezing that Wiped 12% off Bitcoin

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Whenever U.S. Federal Reserve Chairman sneezes, expect Bitcoin to look for a hiding corner. The cryptocurrency lost double digit value after the U.S. central bank boss said he has “serious concerns” on Facebook Libra, a stablecoin cryptocurrency which Facebook plans to unveil in coming months. But it was not only Bitcoin:”the world’s second and third-largest cryptocurrencies — ether and XRP — also fell. Ether was down 13% at $270 a token, while XRP fell 15% to about 33 cents”.

Bitcoin is sliding after Federal Reserve Chairman Jerome Powell poured cold water on Facebook’s plans to launch a cryptocurrency.

The world’s best-known digital coin — which has experienced a meteoric rise in 2019 — fell 12% to about $11,450 on Thursday, according to CoinDesk data.

Bitcoin had hit a 17-month high above $13,000 just two weeks ago. It’s currently up about 200% since the start of the year, having gathered momentum as large companies like Facebook and Fidelity get involved in the space.

But it began sliding as Powell said that he held “serious concerns” about Facebook’s planned digital currency Libra. The social network is looking to launch the token alongside a consortium of companies including Uber and Visa.

“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” Powell said at a congressional committee Wednesday. “These are concerns that should be thoroughly and publicly addressed.”

Yet, Bitcoin is still doing well, at least nearly doubling over the last few months.

How Facebook Libra Cryptocurrency Will Affect Nigerian Naira, Inflation, Banking

Performance and Execution – When All Nigerians Play “FIFA U-17 World Cup”

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I will run a workshop in coming days for a major African brand. The firm wants us to put its team on the path of Performance and Execution, making it clear to the team that they could win despite competition from foreign firms. We have been looking at something really positive where Nigeria is the undisputed #1 in the world, and we found one: FIFA U-17 World Cup Tournament.

In the global competition, Nigeria has won 5 gold and three silver medals holding a total of 8 medals. Brazil comes second with 3 gold, 2 silver, and 2 bronze for a total of 7 medals. From this, we will draw insights on being hungry early, executing with sparks of excellence, and then lazily peaking before the dance begins.

Then, how can teams win, win and keep winning as President Trump would like to note: we will keep winning until our enemies will be tired. Yes, you will not be the one that will be tired, of winning, but those despising your wins.

How can all Nigerians play FIFA U-17 World Cup and win in other sectors of our national existence?

We are the best U-17 team in the world. Can we boast of another area in a positive way?