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

AbstractIn 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

Service provider boundaries in competitive markets: the case of the logistics industry

The study empirically investigates service provider firms’ attempts to move to higher value added market segments in competitive and fragmented markets; using logistics services as a context. Novelty is added by taking the provider not the customer or outsourcing actor perspective, common to current third-party logistics perspectives. Data were collected in the form of semi-structured interviews with management at various provider firms. The interview guide was based on theoretical constructs regarding tangible and intangible capabilities (RBV) as well as constructs related to governance and integration (TCE). Unlike customer focused studies, this study is able to identify what distinguishes the rare successful boundary crossing attempts that lead to a more profitable market position. The key finding which contradicts studies based on the customer/outsourcing actor perspective, is that a switch from a highly commoditized market position to a higher margin position is only possible, if relationships and network capabilities are leveraged, regardless of the assets and physical resources available to the firm. The presentation of service boundaries as both dynamic and fluid and the use of RBV are contributions, building on existing theory, illustrating why providers of commoditized services cannot escape from low-margin, competitive market positions simply by acquiring tangible assets

Dimensions of Digital B2B Platforms in Logistics – A White Spot Analysis

Digital platforms have not only transformed entire B2C market segments but also created new markets benefiting from indirect network effects by providing technological building blocks and infrastructure. Digital platforms and according business models can also be found in the B2B context. Especially, logistics seems to be an adequate application for digital, platform-based business models. The present article focuses on B2B logistics platforms and questions whether principles of B2C platforms can be transferred to the domain of logistics. In order to assess the transferability of B2C platform characteristics, a white spot analysis is conducted along a sample of 54 digital platforms. The goal of the white spot analysis is to provide insights into the characteristics of digital B2B platforms in logistics. Moreover, the analysis provides a basis for the discussion whether B2C platform principles can be adopted in an industrial context

Logistics service providers in the supply chain

Obecnie główny problem związany z zarządzaniem łańcuchem dostaw (SCM) dotyczy tworzenia długoterminowych, trwałych relacji pomiędzy przedsiębiorstwem i innymi uczestnikami łańcucha dostaw. Strategiczne partnerstwo jest kluczowym czynnikiem efektywności biznesu. Rynek zintegrowanych usług w sferze SCM rozwija się gwałtownie, a same te usługi stają się coraz bardziej złożone. Rosnący rynek powinien zaowocować innymi modelami strategicznego zachowania dostawców usług logistycznych. Jednym z tych modeli jest partnerstwo. Dzisiejsza prasa często donosi o kreacji "partnerstwa logistycznego". W tym kontekście logistyka jest rozumiana jako dziedzina o strategicznym znaczeniu i źródło przewagi konkurencyjnej, kiedy to uczestnicy łańcucha dostaw kooperują ściśle nie tylko z dostawcami i konsumentami, lecz także z innymi operatorami usług logistycznychThe main current focus of supply chain management (SCM) is the creation of longterm, mutually beneficial relationships between a company and other participants in the supply chain. Strategic partnerships are a key factor in the effectiveness of the business of a company as a whole. The market of integrated services in the SCM sphere is developing rapidly, and these services themselves are becoming more complex. A growing market should offer different models of strategic behaviour by suppliers of logistics services. One of these models is that of partnerships. Industry journals and press releases today often report the creation of "logistics partnerships". In this context, "logistics" is understood as a sphere of strategic importance and the source of competitive advantages, where supply chain participants cooperate closely not only with their suppliers and consumers, but also with providers of logistics service

Knowledge Integrated Business Process Management for Third Party Logistics Companies

The growing importance of logistics as well as the increasing dynamic complexity of markets, technologies, and customer needs has brought great challenges to logistics. In order to focus on their core competency in such a competitive environment, more and more companies have outsourced a part or the entirety of the logistics process to third party logistics (3PL) service providers. 3PL has played a crucial role in managing logistics processes within supply chain management. Logistics processes require and supply various types of knowledge for planning, developing, operating, controlling and improving business processes. Therefore, in the current knowledge era, knowledge integrated business process management (KIBPM) is of significant importance for 3PL. This work applies KIBPM in 3PL from both a theoretical and practical perspective. The methodology for this study is a combination of literature and primary source research. From the theoretical perspective, it reviews the related literature on knowledge, KM, KIBPM and 3PL. It next analyzes application potentials as well as basic theories of KIBPM in 3PL, and proposes a framework for application. Furthermore, it studies the issues, knowledge sources and content, as well as KM approaches from the strategic and operational perspectives. In particular, it discusses the dynamics, logistics networks, business process networks and tacit knowledge sharing in 3PL. From the practical perspective, a case study of a leading 3PL provider demonstrates the drivers, practices and approaches of KIBPM application. The case study is based on in-depth interviews and extensive access to the secondary data of the firm. It analyzes the core business processes, the process knowledge and key activities of KM in the formulation of business strategy and the operation of business processes in contract logistics. In addition, it applies the proposed framework in this case. Furthermore, it discusses the findings from the literature and case study that relate to the research questions, compares the differences and similarities of KM in 3PL between theory and practice, and puts forward some research and managerial implications. This study has come to the conclusion that it is more effective and efficient to integrate KM in business processes. Knowledge of market, customer requirements, partners, and competitors and collaborative KM in the logistics networks are essential when choosing competitive strategies, process designs and development strategies for business. 3PL needs dynamic capabilities to sustain competitive advantage through KM. In operation, knowledge related business procedures and domains, as well as the results in project management of warehousing, intermodal transport and cooperation between geographic networks, have considerable value for business process execution, evaluation and improvement. 3PL motivates tacit knowledge sharing and effective knowledge acquisition, production, warehousing, distribution and application with a trusting organizational culture, process oriented structure, appropriate technology, and incentive measures. However, while KM is a tool for improving the competency and performance for the organization, learning capability is more important to keeping sustainable competitive advantage in the long term for 3PL. The application of KIBPM in 3PL supports business process management at both the strategic and operational levels. It especially contributes to business development, collaborative projects, intermodal transport, and logistics service improvement

A strategic decision-making model for optimal alignment of 3PL providers with SASOLs outbound supply chain

Abstract in English, Afrikaans and SesothoThe study was inspired by the global phenomenon of failure rates of outsourcing ventures; yet, the outsourcing value proposition of 3PL providers is promising and potentially lucrative. The approach of the outsourcing venture was thus investigated, specifically how to align and integrate outsourcing parameters appropriately at the inception of the outsourcing venture in order to attain the benefits brought about by the outsourcing decision over the projected life of the outsourcing venture. To this effect, a strategic decision-making model, with the objective of ascertaining optimal alignment and integration was developed. The model comprises a dualistic development followed by a methodological process path to operationalise the strategic decision-making model. A services continuum (development one) is established, which is a permutation matrix that classifies four aspects of importance (service type, category of 3PL provider, strategic alignment and investment), in order to align the aspects optimally and enable appropriate model application. The services continuum is a conglomeration of nine models: a capabilities matrix for 3PL provider services; a framework for evaluating the supply chain role of 3PL providers; a mathematical model; a supplier selection and evaluation process; a presentation of the Hayes–Wheelwright framework; an outsourcing variables differentiated model; four categories of the 3PL providers model; an estimated path model; and a process integration via survey data collection model. The services continuum was extended for utilisation with risk management practices, and an outsourcing risk matrix (development two) was established. The enablement of the outsource risk matrix is an element review, consisting of three categories: collaboration and integrated planning systems; performance measurement; and broad-based black economic empowerment. The strategic decision-making methodology process path was developed as having three phases, which operationalise the strategic decision-making model. The research was primarily focussed on literature reviews, with the models classified according to the services continuum. To a lesser extent, the research focussed on primary data, which served as model application input specifically for application requirements related to Sasol. The study established a universally applicable strategic decision-making model, as well as the application of the model for Sasol’s outbound (final packaged product) supply chain.Thuto e ile ya kgothaletswa ke tshebetso ya lefatshe mabapi le maemo a ho hloleha ha ho nyaolwa/ntshuwa ha diprojeke kgwebong; leha ho le jwalo, tlhahiso ya boleng ba ditshebeletso tsa 3PL e a tshepisa ebile e ka ba le hlahiso ya tjhelete e ngata. Ka tsela eo, mokgwa wa ho tswa kgwebong o ile wa phenyekollwa, haholoholo mabapi le ho tsamaisana le ho kenyelletsa maemo a ho ntshetsa pele maruo ka mokgwa o nepahetseng ha ho thehwa kgwebo ya ho ntshetsa pele ho fumana melemo e tliswang ke qeto ya ho ntshetsa pele ka bophelo ba morero wa ho nyaolwa kgwebong. Ka lebaka lena, ho ntshetswa pele mokgwa/motlolo o motle wa ho etsa diqeto, ka sepheo sa ho netefatsa hore ho na le boemo bo nepahetseng le ho kopanngwa ho tsitsitseng. Motlolo ona o na le ntshetso pele e habedi e latelwang ke tshebetso ya mokgwa wa ho kenya tshebetsong tsela ya ho nka diqeto. Tatellano ya ditshebeletso e tswelang pele (ntshetsopele ya pele) e a thehwa, e leng phethoho ya tikoloho e kgethollang dikarolo tse nne tsa bohlokwa (mofuta oa tshebeletso, mokga wa mofani wa 3PL, kemiso ya moralo le matsete), e le ho dumellana le dintlha ka tsela e nepahetseng le ho etsa hore ho sebediswe motlolo hantle. Ditshebeletso tse tswelang pele ke kopano ya dimotlolo tse robong: bokgoni ba maemo a tikoloho bakeng sa ditshebeletso tsa bafani ba 3PL; sebopeho sa ho hlahloba phepelo ya tatellano ya ho nka karolo ha bafani ba 3PL; mokgwa/motlolo wa mathemathiks; kgetho ya mofani le mokgwa wa o hlahloba; tlhaloso ya moralo wa Hayes-Wheelwright; mefuta e fapaneng ya ho nyaola dikarolo tse fapaneng; ntho tse mene tsa bafani ba 3PL; mohlala wa tsela ya dimotlolo; le mokgwa wa ho kopanya ka mokgwa wa ho bokella lesedi la dipatlisiso. Dishebeletso tse tswelang pele di ile tsa atoloswa bakeng sa tshebediso ya mekgwa ya taolo ya dikotsi, mme maemo a tikoloho a kotsing ya boipheliso (ntlafatso ya bobeli) a thehwa. Ho kengwa tshebetsong ha kotsi ya maemo a tikoloho ke ntho e shejwang botjha e nang le mekga e meraro: mekgwa ya ho sebedisana le meralo e kopanetsweng; tekanyo ya tshebetso; le ho matlafatsa bofuma ba batho batsho lehlakoreng la moruo. Mokgwa wa ho etsa diqeto o ile wa ntlafatswa e le o nang le mekgahlelo e meraro, e sebetsang ka mokgwa o motle wa ho etsa diqeto. Phuputso e ne e lebisitswe haholo ditabeng tsa tlhahlobo ya dingodilweng, le dimotlolo tse kgethollwang ho latela ditshebeletso tse tswelang pele. Ho ya ka tekanyo e nyenyane, dipatlisiso di lebisitse tlhokomelong ya lesedi la mantlha, le neng le sebetsa e le mokgwa wa ho kenya letsoho bakeng sa ditlhoko tsa kopo tse amanang le Sasol. Phuputso ena e thehile mokgwa wa ho etsa diqeto tse amohelehang lefatsheng ka bophara, hammoho le ho sebediswa ha setshwantsho sa phepelo ya tlhahiso ya Sasol (thlahiso ya ho qetela).Dié studie is deur die globale verskynsel van die falingstempo van uitkontrakteringsondernemings geïnspireer; ten spyte hiervan lyk die uitkontrakteringswaardevoorstel van 3PL-verskaffers belowend en is dit potensieel winsgewend. Die benadering wat die uitkontrakteringonderneming volg, is derhalwe ondersoek en in die besonder hoe om die uitkontrakteringparameters by die aanvang van die uitkontrakteringonderneming toepaslik in lyn te stel en te integreer om die voordele te benut van die uitkontrakteringsbesluit oor die geprojekteerde lewe van die uitkontrakteringsonderneming. ’n Strategiesebesluitnemingsmodel wat ten doel het om optimale inlynstelling en integrasie te verseker, is dus ontwikkel. Die model bestaan uit ’n dualistiese ontwikkeling, gevolg deur ’n metodologiese prosesbaan om die strategiese besluitnemingsmodel te operasionaliseer. ’n Dienstekontinuum (ontwikkeling een) is op die been gebring, wat ’n permutasiematriks is wat vier aspekte van belangrikheid (dienssoort, kategorie van die 3PL-verskaffer, strategiese inlynstelling en investering) klassifiseer, ten einde die aspekte optimaal in lyn te stel en toepaslike modeltoepassing moontlik te maak. Die dienstekontinuum bestaan uit ’n versameling van nege modelle: ’n bekwaamheidsmatriks vir 3PL-diensverskafferdienste; ’n raamwerk om die voorsieningskettingsrol van 3PL-verskaffers te evalueer; ’n wiskundige model; ’n verskafferseleksie en evalueringsproses; ’n aanbieding van die Hayes-Wheelwright-raamwerk; ’n uitkontrakteringsveranderlike-gedifferensieerde model; vier kategorieë van die 3PL-verskaffersmodel; ’n geraamde baanmodel; en prosesintegrasie deur middel van ’n ondersoekdata-insamelingsmodel. Die dienstekontinuum is uitgebrei vir gebruik by risikobestuurspraktyke en ’n uitkontrakteringrisikomatriks (ontwikkeling twee) is op die been gebring. Die bemagtiging van die uitkontrakteringsrisikomatriks is ’n elementhersiening, wat uit drie kategorieë bestaan: samewerkings- en geïntegreerdebeplanningstelsels; prestasiemeting; en breë swart ekonomiese bemagtiging. Die strategiese besluitnemingsmetodologieprosesbaan is met drie fases ontwikkel, wat die strategiese besluitnemingsmodel operasionaliseer. Die navorsing het hoofsaaklik op literatuuroorsigte gefokus, met die modelle wat volgens die dienstekontinuum geklassifiseer is. Die navorsing het in ’n mindere mata op die primêre data gekonsentreer, wat as die modeltoepassingsinset gedien het, in die besonder vir die toepassingsvereistes wat op Sasol betrekking het. Die studie het ’n universele, toepaslike strategiesebesluitnemingsmodel daargestel, asook die aanwending van die model op Sasol se uitgaande voorsieningsketting (finaal verpakte produk).Business ManagementD. Phil. (Management Studies

ICT Innovation Diffusion in Small Logistics Service Providers: an Empirical Survey

For companies competing in highly dynamic markets, innovation is considered a fundamental component of a successful business as it allows companies to sustain profit margins, sales growth and reduce competitors’ pressures. Information and communication technology (ICT) is essential innovation enablers especially in service companies. The focus of the paper is on the analysis of the role of ICT in innovation processes of small third-party logistics service providers (3PLs). On the basis of quantitative evidence emerging from a recent survey carried out on the Italian 3PL market, the paper analyses how ICT is used to support innovation and the factors the inhibit/facilitate the usage of ICT in such companies. Implications for supply chain innovation management are derived from the research and managerial perspectives

A multi-agent platform for auction-based allocation of loads in transportation logistics

This paper describes an agent-based platform for the allocation of loads in distributed transportation logistics, developed as a collaboration between CWI, Dutch National Center for Mathematics and Computer Science, Amsterdam and Vos Logistics Organizing, Nijmegen, The Netherlands. The platform follows a real business scenario proposed by Vos, and it involves a set of agents bidding for transportation loads to be distributed from a central depot in the Netherlands to different locations across Germany. The platform supports both human agents (i.e. transportation planners), who can bid through specialized planning and bidding interfaces, as well as automated, software agents. We exemplify how the proposed platform can be used to test both the bidding behaviour of human logistics planners, as well as the performance of automated auction bidding strategies, developed for such settings. The paper first introduces the business problem setting and then describes the architecture and main characteristics of our auction platform. We conclude with a preliminary discussion of our experience from a human bidding experiment, involving Vos planners competing for orders both against each other and against some (simple) automated strategies

ICT Innovation Diffusion in Small Logistics Service Providers: an Empirical Survey

For companies competing in highly dynamic markets, innovation is considered a fundamental component of a successful business as it allows companies to sustain profit margins, sales growth and reduce competitors’ pressures. Information and communication technology (ICT) is essential innovation enablers especially in service companies. The focus of the paper is on the analysis of the role of ICT in innovation processes of small third-party logistics service providers (3PLs). On the basis of quantitative evidence emerging from a recent survey carried out on the Italian 3PL market, the paper analyses how ICT is used to support innovation and the factors the inhibit/facilitate the usage of ICT in such companies. Implications for supply chain innovation management are derived from the research and managerial perspectives