Rationale for utilizing 3PL in supply chain management: A shippers' economic perspective

Abstract

In this paper we first propose a conceptual framework for evaluating 3PL (third-party logistics) utilization in SCM (supply chain management), in which it is assumed that shippers may enjoy advantages derived from four contributory sources of 3PL specialization: scale, know-how, searching ability, and IT skills. It is also supposed that shippers may particularly benefit from 3PL when facing uncertain business environments. We also apply principal-agent relationships to shippers and 3PL providers. Further, we see enhancing "agency efficiency" as important to obtaining the benefits of 3PL utilization. We also look at the role of 3PL provider selection, the "hold-up" problem under incomplete contracts, and asset ownership. After that we briefly discuss the utilization of 3PL and environmental concerns. These are the main points that we consider related to 3PL utilization. The main contribution of this study is to identify discussion points from models and theories, such as contract theory, that relate to the utilization of 3PL in SCM.

Confirmatory Factor Analysis for Testing the Validity and Reliability of an Internal Capability and Logistics Outsourcing Measurement Scale

“…The majority of research on the reasons for the outsourcing decision has centered on the type of outsourced activities and benefits of logistics outsourcing [9]. Several reasons are reported in the literature to motivate companies to outsource logistics activities, such as a lack of competences and resources required within the own company, reduction of the capital employed [12], increased environmental awareness [12], expansion into unfamiliar markets, trends towards centralized distribution systems and increased flexibility [13,14]. Several benefits of logistics outsourcing have also been reported in the literature, such as increased market coverage, improved customer service, reduction in capital investments and cost savings, reduction in the complexity of logistics operations and increased flexibility towards the changing requirements of customers.…”

“…The effective outsourcing processes of individual or multiple logistic functions are driven by potential improvements in customer satisfaction, in terms of time, place, service quality, form utility, Confirmatory factor analysis for testing the validity and reliability of an internal… 143 and cost effectiveness as a result of the more effective use of financial resources in the development of core competencies [12]. Tezuka [13] went further by stating that researchers also agreed that in integrating outsourced logistics functions across multiple functional areas, firms can contract processes as opposed to discrete activities. The contracting of processes allows firms not only to streamline their flows of goods and information and human resources in their supply chains, but also to reduce costs associated with asset ownership, the monitoring of performance, and the hiring, management, and training of personnel [14].…”

An extended fuzzy TOPSIS–GRA method based on different separation measures for green logistics service provider selection

“…Many researches claim that if logistics firms do not measure company performance and monitor it in a flow of functions rather than individual activities, supply chain will not be operative (Robertson et al 2002). 3PLs provide integrated logistics services and are closely related to supply chain management (Tezuka 2011). The value-added services provided by 3PLs can be ranged as repair, remanufacturing, re-packaging and re-labelling (Min and Ko 2008).…”

“…Azadi and Saen (2011) use DEA to select third-party reverse logistics providers (3PRLPs). The relationship between 3PLs and environmental consciousness is investigated in Tezuka's (2011) study. He analyses the environmental issues from the point of economy and names this as ''externality'' problem.…”

Finding the Best Third-Party Logistics in the Automobile Industry: A Hybrid Approach

“…After introducing the concept of 3PL, many companies and industries attempted to implement it. During these times many papers have been published and showed that it was implemented successfully in industries such as transportation [3][4][5], warehousing [6], healthcare [7], or oil and gas [8].…”