Third Party Logistics: Benefits and Issues
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Third Party Logistics (3PL): Benefits and Issues
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Abstract
Third-Party Logistics have continued to play a strategic role in the management of supply chains most especially in the developed world over the past years and has seen a consistent increase in its usage in the world. In Malawi the concept is still new and has also been adopted by the public sector. There are clearly benefits associated with the use of the approach which enables companies to concentrate on their core competencies. However, there are critical issues to be addressed in order to experience the benefits. This paper attempts to broadly identify the benefits offered by 3PL arrangements and also presents the critical issues and requirements necessary to be considered for users/firms to successfully benefit from the relationship. Some of the benefits and issues have been related to the experience of a 3PL user and a 3PL provider which were collected through interviews with the two entities.
------------------------------------------------------------------------------------------------------------------------ 1. 2. Introduction
A third-party logistics (3PL) is a provider of outsourced logistics services. Logistics services encompass anything that involves management of the way resources are moved to the areas where they are required. In business, 3PL has a broad meaning that can be applied to any service contract that involves storing or shipping of things. A 3PL service may be a single service such as transportation or warehouse storage or it can be a system-wide bundle of services capable of managing the entire supply chain (Anon., 2010).
The growth of 3PL companies has been driven by the need for businesses to become leaner, reducing assets and allowing focus on core business processes (Murray, 2010). In a recent study
Third Party Logistics (3PL): Benefits and Issues
-------------------------------------------------
-------------------------------------------------
Abstract
Third-Party Logistics have continued to play a strategic role in the management of supply chains most especially in the developed world over the past years and has seen a consistent increase in its usage in the world. In Malawi the concept is still new and has also been adopted by the public sector. There are clearly benefits associated with the use of the approach which enables companies to concentrate on their core competencies. However, there are critical issues to be addressed in order to experience the benefits. This paper attempts to broadly identify the benefits offered by 3PL arrangements and also presents the critical issues and requirements necessary to be considered for users/firms to successfully benefit from the relationship. Some of the benefits and issues have been related to the experience of a 3PL user and a 3PL provider which were collected through interviews with the two entities.
------------------------------------------------------------------------------------------------------------------------ 1. 2. Introduction
A third-party logistics (3PL) is a provider of outsourced logistics services. Logistics services encompass anything that involves management of the way resources are moved to the areas where they are required. In business, 3PL has a broad meaning that can be applied to any service contract that involves storing or shipping of things. A 3PL service may be a single service such as transportation or warehouse storage or it can be a system-wide bundle of services capable of managing the entire supply chain (Anon., 2010).
The growth of 3PL companies has been driven by the need for businesses to become leaner, reducing assets and allowing focus on core business processes (Murray, 2010). In a recent study
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