FNS Solution B: 3PL

FNS could contract with a third-party logistics “3PL” provider. Doing so would effectively outsource the company’s entire logistical operations. Outsourcing enables companies to focus on their core competencies , which in the case would be the pleasing of the customer through the quick-and-easy provision of stylish, affordable, of-the-moment ultra-fast fashion. The performance of the 3PL in terms of supporting FNS’s 24-hour delivery promise must be embedded in the KPIs. FNS could establish 95% 24-hour OTIF (on-time, in-full) as the principle KPI.

High operating costs and loss of control are the main penalties of contracting with 3PLs, however. These risks notwithstanding, the 3PL option would give FNS the opportunity to concentrate on adding value in other ways and devoting more resources to design, whicb is probably the company’s greatest competency.