Third Party Logistics - Research Paper Example

? Third Party Logistics (3PL) Table of Contents ………………………………………………………………………………………...3 Introduction……………………………………………………………………………………….4 Literature review…………………………………………………………………………………..4 Data and methodology……………………………………………………………………………5 Results……………………………………………………………………………………………6 Discussion…………………………………………………………………………………………6 Conclusion………………………………………………………………………………………...7 References…………………………………………………………………………………………9 Abstract Third party logistic has been in use by many companies and business organization. It refers to outsourcing the service from another organization. The service is rendered on their behalf this has been effective in a way that all the company saves on cost. They are all provided under the supply chain management and they defer in services provided. The practice has been adapted by many organizations and business with the aim of saving on cost. Introduction Determining how outsourcing logistic service is more effective in the supply chain is the main aim of the study. How it’s created the issue of completion and effectiveness (Wisner, 2011). The process of evaluating the best in logistic service provider will be studied and evaluated. Procedures and criteria of the selection process will be laid and stated upon. A study was carried with the aim of providing a process and suggesting on the method of selecting the best in the industry. Evaluation was done on firms that have engaged on the practice. Methods used in the study and ways forward will be discussed. The study will try and discuss the merits and demerits of the company under research (Blanchard, 2010). The third party logistic will also be put in under scrutiny on how it operates and eventually propose a way forward. Best channels will be laid on how to conduct third party logistic economically laid. Determination of key players in the logistic industry will be laid down and their role in ensuring smooth service delivery studied as well (Gibson & Novack, 2008).Different roles of the logistic in service delivery will be investigated. The process of selection and how effective it is will be discussed. Abbreviation 3LP refer to the study refer to third party logistic. Literature review The concept of third party logistic is a new trend supply chain management and has been adapted by the many in the business sector. They include the activities of the warehouse which include packaging, value addition and storage. Transport and handling of goods is also a function of logistic. It expands beyond this and lay emphasis on it being a management function. It entails many phases which are determined by the policies laid upon by the given firm (Shah, 2009). They usually include logistic as a specialization, it being a coordinated function, it being a process and as a function in supply management. Of which they are interested in material flow and distinctly. The new trend in logistic is the third party logistic which entails outsourcing. it entails seeking for the services of a different organization to aid in the functions of supply chain management. This enables the company focus on the external environment which includes the competitors and the other services performed by the outsourced organization. It usually comes with its success and down f all as well, it may either affect the brand loyalty or promote it depending the rights given by the outsourced company in service delivery (Wisner, 2011). Data and methodology In an effect to determine the effectiveness of the third party logistic several methods were used. Some companies where kept under study, focus was laid on the supply chain management and analysis done to determine how effective has the third party logistic been as compared to companies providing the service using other channels (Gibson & Novack, 2008). To determine the data some methods and theories where used in the study. Reports where then taken under intense analysis. Methods used included the analytical hierarchy processes where company is then looked into depending on order of priority an how the products flowed from raw material to the final product to the consumer. Depending on the data collected the ones using third party logistic. Information on the progress of the company is then collected, comparison done with response to the customer. Positive and negative comments on the practice were gathered and recorded (Blanchard, 2010). Other modes of logistic were kept in to the question to act as bench mark. Results Information gathered resulted had some outcomes and was key to the study. It showed the difference in the output and service delivery between the companies using the third party logistic in their supply chain management and those using other means of logistics. The ones using the 3PL had better outcome while those using other means showed limited revenue and increase in cost of production. The issue of bottleneck was also valued in that those using the 3PL had a smooth flow in there line of production (Wisner, 2011). The use of analytical hierarchy processes resulted to realization of some factors. They include cost of service, in that there was a reduction in the cost of service with the inception of 3PL. they where brought about by freight charges and storage cost has a result of goods staying long in the warehouse. Market share increased due to adaption of the 3PL. Questioner filled by companies showed the positivity of third party logistic (Gibson & Novack, 2008). Discussion Companies that uses third party logistic has been seen as to be more advantageous, they had outsourced a other companies to carry out its logistic services. In that it gives time for the company to concentrate in ensuring competitors are out shadowed. Third party logistic resulted in the cost of doing business reduced by a certain percentage (Wisner, 2011). The use of analytical hierarchy processes is usually effective in that it concentrates mainly in setting criteria and keeps in record and references to alternative means and comparison emerge with the desire of ensuring positive result. The information gathered was posted to various target groups for scrutiny. The logistic process of identifying the righty group and firm to perform the duties is a technical one and should be done carefully. In the aim of selecting one which is most suitable some quality must be met. It should be done in a way that the third party does not affect service delivery but instead promote and improve it. Choosing one that may affect the brand loyalty of the product may affect the client base, in that customers may seem to have a perspective that the third party owns the brand hence causes negative implications to the company image (Plunkett, 2009). One who will deliver on time and will not cause bottle necks at any stage is preferred for the task of providing logistic services. The third party will act in the interest of the company in that the policies of the deal should be fully on the interest of the firm. 3PLis new trend in the supply chain management and has involved the entire business sectors. Mostly the well developed companies and the multinational has adapted the method of logistic. This paper was targeting a number of groups in the society they include the upcoming industry, where suggestions on which channel to use in their supply chain management. The other target group is the supply chain management in that the best way of doing and carrying out logistic function is suggested to be third party logistic. The last group is the student and investors aiming at venture in to the logistic industry, assistance has been laid on how to make informed decision (Wisner, 2011). Conclusion The supply chain management is a wide field in that it entails the entire process of handling and supply of goods to the final consumer. It concentrates in service delivery as well as the trying to cut on operational costs. The manager selects from a variety of option to emerge with the best. The best means of logistic is the third party logistic in which the company gets involved indirectly in the matter of logistic. The practice has been termed as successful by many in the industry and has been recommended for both infant businesses and those who are mature (Blanchard, 2010). References Blanchard, D. (2010). Supply Chain Management Best Practices. Chicago: John Wiley & Sons. Gibson, B. & Novack, R, (2008). Supply chain management: a logistics perspective. Chicago: Cengage Learning. Plunkett, J. (2009). Plunkett's Transportation, Supply Chain and Logistics Industry Almanac 2009. New York: Plunkett Research, Ltd. Shah, J. (2009). Supply Chain Management: Text and Cases. Mumbai: Pearson Education India. Wisner, J. (2011). Principles of Supply Chain Management: A Balanced Approach. Chicago: Cengage Learning. Read More