Third party logistics providers (3PL) offer a variety of services, but the primary function of these organizations can be summarized as providing transportation, warehousing, and management of inventory for another company. Some companies handle inventory on consignment. Consignment stock is often defined as inventory owned by one party (in this case the “Supplier”), but held by another (the “3PL”). This risk rests with the first party, and do not get paid until the goods are sold (in this case the third player, the manufacturing “Company”). 

Nowadays most companies are asking their suppliers to hold inventory from which they can pull at a moment’s notice. In my fifteen years of service as a Senior Application Consultant for Ultriva, I have noticed a trend of towards Consignment/Vendor Managed Inventories/Supplier Owned Managed inventories. The reality is whether the company carries the inventory or the supplier carries the inventory, inventory is an inventory.  At the end of the day manufacturing companies are committed to acquiring this inventory.