Michelle Zeigler

  •  July 01

Logistics Reimagined: The Benefits of Using a Virtual 3PL Vendor

As the world becomes increasingly digitized, a novel idea of a virtual third-party logistics (3PL) vendor has been established in the pharmaceutical industry. A virtual 3PL offers various benefits to companies looking to outsource order-to-cash resources to create cost savings, enhanced flexibility, and/or improved scalability. Moreover, a partnership with a virtual 3PL allows manufacturers to potentially focus on logistics management themselves, while the virtual 3PL assists in the oversight of order-to-cash services such as invoicing, collections, reverse logistics crediting, contracting, chargebacks management, and customer service call intake.

Feedback from one virtual 3PL suggests biopharma manufacturers often want to retain logistics support in-house to ensure white-glove management and on-time delivery of their therapies. Insourcing order-to-cash operations are not prioritized in the same way.

One of the most significant advantages of a virtual 3PL is the ability to operate without the overhead costs associated with traditional 3PLs. A virtual 3PL can streamline order-to-cash operations by leveraging technology and automation solutions, potentially resulting in more competitive pricing for manufacturers. Virtual 3PLs are typically more flexible and open to process customization and less concerned with scalability compared to some traditional 3PLs. This could lessen financial burdens for small and medium-sized manufacturers with limited resources to invest in their own order-to-cash infrastructure. Whether a company manages inventory operations internally or externally, this approach can remove the risk of “going all in” with a single, traditional 3PL partner.

While this solution is an attractive model, it is not a one-size-fits-all solution. A traditional 3PL with full order-to-cash and warehousing capabilities could be a better option for manufacturers with high-volume shipments and sales. Additionally, for the same reason it’s attractive to some, others may prefer to align and manage an external relationship with a single partner instead of multiple, where building out infrastructure and connectivity between various systems and vendors is required.

3PL partners are integral to many pharmaceutical supply chain solutions and distribution models. They are more than pick, pack, and ship operations providers—most offer seamless support across all storage, distribution, and backend functions while creating a strategic partnership with their manufacturer base. The newly developed virtual 3PL concept could be a more cost-effective, flexible, and efficient option for smaller biopharma clients looking to outsource their order-to-cash operations and optimize their supply chains.

Archbow Consulting helps pharmaceutical and biotech companies in the USA and Europe design, build, and optimize product distribution and patient access strategies. Archbow was founded by industry veterans to meet a need in the marketplace for consulting options that offer diverse real-world experience, are able to leverage deep connections across the industry, and can also provide actionable strategic guidance. We invite you to learn more about our team, services, and clients’ success, and connect with us via email, LinkedIn or subscribing to this blog which you can do below.

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