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3rd Party Logistics - Essay Example

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Third party logistics (3PL or TPL) involves the use of the external company to execute selected or entire logistical activities to the organization (Dimitris, 2012). Also, it is used to refer to the firms providing services to its customers of outsourced logistics services for…
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3rd Party Logistics
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3rd Party Logistics

Download file to see previous pages... Customer Adapter: they deal with small clients by offering all logistics functions to their clients at their request and help to improve those services without introducing new services (Dimitris, 2012).
3PL integrate with customers to provide one or more logistic related functions such as warehousing, transportation, packaging, distribution, etc. 4PL firms use the services of 3PL to offer complete supply chain solutions to other firms basing its performance on technologies, accumulation of resources and managerial capacity (Coyle et al., 2012). While 3PL targets particular functions, 4PL is involved in managing the entire logistics process.
Different firms arrive at a decision on whether to hire or not to hire the services of 3PL in a variety of ways. Such decisions emanate from the corporate level, divisional level or local level. Firms learn about the services of 3PL in various ways including the “sales calls by representatives of the contract logistics firms and discussions with other logistics professionals” (Dapiran et al., 1996, p.39). Different stakeholders should discuss and come to an agreement on whether to use 3PL. If there is a mutual agreement to hire 3PL, the firm should assess various 3Pl firms in order to determine the most successful firm (Coyle et al., 2012). At this point, the organization should consider their personal knowledge of the contractor, coverage, references, prior experience, competence, expertise in project management and implementation of new system.
The firm may issue a request for quotation (RFQ) in order to obtain feedback from the interested bidders upon which they can base their decision by selecting prequalified contractor. The firm receives a proposal from 3PL vendors and makes a review to match the requirements and criteria (Autry et al., 2013). The 3PL presents their company and discusses solutions and benefits. Then the firm will ...Download file to see next pagesRead More
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