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Article
Publication date: 29 August 2019

Nasrin Akter, Prem Chhetri and Shams Rahman

Bangladesh is becoming one of the emerging destinations for global outsourcing. However, little is known about the usage patterns of third party logistics (3PL) outsourced…

Abstract

Purpose

Bangladesh is becoming one of the emerging destinations for global outsourcing. However, little is known about the usage patterns of third party logistics (3PL) outsourced services. The purpose of this paper is to examine the extent of 3PL usage, the organisational factors affecting 3PL usage, impacts of 3PL and the future trend of 3PL usage in Bangladesh.

Design/methodology/approach

A survey questionnaire is used to collect data against a number of items pertaining to the extent of 3PL use and its impact on performance. A total of 1,000 organizations were randomly selected from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) database. The survey resulted in 243 responses, out of which 150 organisations have adopted 3PL services. A chi-square test is conducted to assess statistical significance of the hypothesized relationships among the variables relating to 3PL decision-making process and a regression analysis is conducted to assess the strength of those variables to predict the impact of 3PL usage.

Findings

Overall, the results reveal that 3PL services are extensively adopted by businesses (63 per cent) in Bangladesh. Freight forwarding, order fulfilment and shipment consolidation are the top three most frequently outsourced 3PL services. However, the extent of 3PL use varies between manufacturing and service organisations. Results also suggest that logistics system performance is the key predictor of the overall satisfaction of 3PL users.

Research limitations/implications

The key limitation of this study is that both manufacturing and services firms are collectively analysed. Future research will separately investigate the outsourcing 3PL services requirements for two categories of firms. Characterisation of 3PL usage patterns and their drivers has practical significance and strategic implications for logistics practitioners and decision-makers who opt for global outsourcing.

Originality/value

The implementation in the context of Bangladesh to provide an evidence base to formulate business strategies for increasing the adoption of 3PL usage is novel.

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Article
Publication date: 1 October 2006

B.S. Sahay and Ramneesh Mohan

To carry out a comprehensive survey on 3PL practices in India and to establish the impact of usage of third party logistics services on business results.

Abstract

Purpose

To carry out a comprehensive survey on 3PL practices in India and to establish the impact of usage of third party logistics services on business results.

Design/methodology/approach

Begins by analysing the studies carried out on 3PL practices and establishing a research framework. The input variables to the research framework depict the organization‐specific characteristics, such as the extent of usage of 3PL services, the reasons for outsourcing and the impact of the usage of 3PL services. The output function of future usage of 3PL services is influenced by the three input variables. Data collected through survey questionnaire on the input and output variables are used to establish impact of usage of 3PL services on business performance through statistical analysis.

Findings

The usage of 3PL services reveals positive and significant impact on business performance though 3PL practices are still at a nascent stage in India. Additionally, results clearly indicate that significant increase in outsourcing has been planned across all activities of the logistics function in the next 2‐5 years.

Research limitations/implications

Further research work should focus on managing 3PL relationships; selection and contract management of 3PL service providers for building collaborative supply chain partnerships; and identifying critical success factors for 3PL implementation and establishing performance measures for long‐term 3PL relationships.

Practical implications

Detailed study to motivate supply chain managers to outsource and use 3PL services to focus on the core business, drive logistics cost reduction, and improve supply chain efficiency. These indicators should also help the 3PL service providers plan the depth and scope of their service offerings to user organizations in India.

Originality/value

The paper contributes to the current 3PL and supply chain practices and the emerging trends in 3PL services for achieving improved business results and supply chain efficiencies.

Details

International Journal of Physical Distribution & Logistics Management, vol. 36 no. 9
Type: Research Article
ISSN: 0960-0035

Keywords

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Article
Publication date: 13 November 2017

Gerson Tontini, Klaus Solberg Söilen and Ricardo Zanchett

The purpose of this paper is to study the nonlinear impact of quality dimensions of third-party logistics (3PL) services on customer satisfaction and loyalty.

Abstract

Purpose

The purpose of this paper is to study the nonlinear impact of quality dimensions of third-party logistics (3PL) services on customer satisfaction and loyalty.

Design/methodology/approach

By interviewing 167 small-size companies, and using penalty and reward contrast analysis, the paper explores the nonlinear impact of seven dimensions of 3PL services (safety, fault’s recovery, reliability, speed, flexibility, communication, and friendliness) on customer satisfaction and loyalty.

Findings

The results confirm the existence of the dimensions’ nonlinear impact on customer satisfaction. It also shows that some quality dimensions have a direct and nonlinear impact on loyalty. The dimension “friendliness” has a direct impact on loyalty if the company has a below market average performance, which may lead customers to switch service providers. “Flexibility on collection and delivery” has a direct impact if the company has a higher performance, contributing to customers’ intention to continue using the service. Another finding is that, if the company delivers good service recovery after the customer found faults in the service, and if customers trust the company service, they say they intend to continue to work with the company.

Research limitations/implications

The present research focused only on small companies in one country (Brazil). Further studies should be carried out to explore different countries, with different realities, and different size of companies.

Practical implications

3PL companies should not only deal with customers’ satisfaction, but also with other quality aspects that directly affect customer intention to continue doing business with the 3PL service provider. These are friendliness, flexibility regarding time and frequency of collection and delivery and faults’ recovery.

Originality/value

The present research confirms that the personal relationship is a crucial aspect to be managed in order to keep customers in the long term. In addition, as opposed to most research looking for the antecedents of satisfaction and loyalty of 3PL customers, the present research shows that there is a direct nonlinear impact of the dimensions’ performance on customers’ loyalty, what should be taken in consideration by 3PL managers. It also shows how penalty-reward contrast analysis may reveal nonlinear antecedents that could be used for better understandings companies’ success in the long term.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 29 no. 5
Type: Research Article
ISSN: 1355-5855

Keywords

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Article
Publication date: 22 March 2011

S.I. Lao, K.L. Choy, G.T.S. Ho, Y.C. Tsim and N.S.H. Chung

The purpose of the paper is to investigate the factors that affect the decision‐making process of Hong Kong‐based manufacturers when they select a third‐party logistics

Abstract

Purpose

The purpose of the paper is to investigate the factors that affect the decision‐making process of Hong Kong‐based manufacturers when they select a third‐party logistics (3PL) service provider and how 3PL service providers manage to retain customer loyalty in times of financial turbulence.

Design/methodology/approach

The paper presents a survey‐based study targeting Hong Kong‐based manufacturers currently using 3PL companies. It investigates the relationship between the reasons for using 3PL services and the requirements for selecting a provider, and examines the relationship between customer satisfaction and loyalty. In addition, the relationships among various dimensions – in small to medium‐sized enterprises (SMEs), large enterprises and companies – of contracts of various lengths are investigated.

Findings

In general, the reasons for using 3PL services and the requirements for selecting 3PL service providers are positive‐related. The dimension of “reputation” of satisfaction influences “primary customer loyalty” positively.

Practical implications

Constructive suggestions are provided to help 3PL service providers allocate their limited resources to business areas that help them to meet the demands of their target customers, increase the number of customers, and improve customer loyalty.

Originality/value

The paper is an attempt to help 3PL service providers find ways to survive in a climate of financial crisis.

Details

Measuring Business Excellence, vol. 15 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

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Article
Publication date: 9 January 2017

Yangyan Shi, Tiru Arthanari and Lincoln Wood

This paper aims to examine the opportunity for third-party logistics providers (3PLs) to develop further value-added services for their clients, focused on purchasing. The…

Abstract

Purpose

This paper aims to examine the opportunity for third-party logistics providers (3PLs) to develop further value-added services for their clients, focused on purchasing. The provider perspectives on third-party purchase (3PP) services are examined in conjunction with their business environment, with a survey informed by transaction cost economics.

Design/methodology/approach

New Zealand 3PL providers were surveyed, and 166 responses were received. Structural equation modeling was used to test the conceptual model.

Findings

From the perspective of 3PL providers, uncertainty, frequency and transaction size, but not asset specificity, are significantly associated with client value from a 3PP service. While asset specificity in investments is not required by 3PLs, they need a high frequency of orders, sufficient order size and low levels of uncertainty as supporting conditions for the development of 3PP services.

Research limitations/implications

The sample focuses on 3PL providers and therefore does not address the behavioral characteristics of users or customers of the services.

Originality/value

This study shows that 3PP services may be further developed by 3PL providers to improve the value offered to their clients.

Details

Supply Chain Management: An International Journal, vol. 22 no. 1
Type: Research Article
ISSN: 1359-8546

Keywords

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Article
Publication date: 28 March 2008

M.N. Qureshi, Dinesh Kumar and Pradeep Kumar

The purpose of this paper is to develop an integrated model, in order to identify and classify, key criteria, and to study their role in the selection process of third…

Abstract

Purpose

The purpose of this paper is to develop an integrated model, in order to identify and classify, key criteria, and to study their role in the selection process of third party logistics (3PLs) services providers for shippers' logistics need.

Design/methodology/approach

In this paper, an integrated model using interpretive structural modeling (ISM) and FMICMAC analysis has been developed to identify and classify the key selection criteria of 3PL services providers, typically identified by many researchers and practiced by the shippers for effective supply chain management. The key criteria are also modeled to find their role and mutual influence in the selection of 3PL services providers.

Findings

The key finding of this modeling helps to identify and classify the criteria, which may be further used, to identify the potential 3PL services provider. Integrated model reveals, criteria such as information technology capability; size and quality of fixed assets and quality of management as independent criteria, whereas criteria such as compatibility, long‐term relation and reputation as dependent criteria. Criterion namely flexibility in operation and delivery is found to be an autonomous criterion. The important criteria like quality of service, information sharing and trust, geographical spread and range of services, delivery performance, operational performance, financial stability, optimum cost, and surge capacity are found as the linkage criteria. Integrated model also establishes the direct and indirect relationship among various criteria, which plays a significant role in the selection process.

Originality/value

The research provide an integrated model using ISM and FMICMAC to identify and classify various key criteria required for the selection of 3PL services providers. The various key criteria have been grouped under four broad classification, namely, dependent criteria, independent criteria, autonomous criteria and linkage criteria based on their driving and dependence power, deduced from fuzzy reachability value. The model helps in the identification, classification and selection of key criteria along with their behavior, thus this research will help logistics managers to select right criteria for the selection of potential 3PL services providers for their logistics need.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 20 no. 2
Type: Research Article
ISSN: 1355-5855

Keywords

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Article
Publication date: 6 May 2020

Sajjida Reza, Muhammad Shujaat Mubarik, Navaz Naghavi and Raja Rub Nawaz

This study examines the outsourcing criteria prevalent in the Hotel industry of Pakistan. In doing so, the study investigates the role of trust in the association between…

Abstract

Purpose

This study examines the outsourcing criteria prevalent in the Hotel industry of Pakistan. In doing so, the study investigates the role of trust in the association between relationship marketing dimensions—communication, opportunistic behavior, reputation, satisfactory prior outcomes and specific investment—and third-party logistics provider’s (3PL) selection.

Design/methodology/approach

Using a close-ended questionnaire, data were collected from 97 hotels of various categories operating in Pakistan and involved in 3PL outsourcing. Partial Least Square–Structural Equation Modeling was employed to estimate the modeled relationships.

Findings

With a high predictive relevance of the model, communication, satisfactory prior outcome and reputation were found to have a significant effect on the trust, whereas the results showed a significant mediating role of trust in the association between communication, reputation and 3PL provider’s selection.

Research limitations/implications

The study uses static data from selected firms and cannot be used to analyze behavior over a period of time. Hence, a generalization of results should be made carefully.

Practical implications

Findings imply that for fully capitalizing on the benefits by virtue of their prospective relationship, the managers must streamline their processes and activities according to path directions that endorse a higher degree of trust in their service providers and establish an effective system of communications interconnecting their mutual goals and objectives.

Originality/value

The outcome of the research study illustrated the perceptions of the local businesses with regards to the 3PL service provider(s) selection via the establishment of trust.

Details

Journal of Hospitality and Tourism Insights, vol. 3 no. 3
Type: Research Article
ISSN: 2514-9792

Keywords

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Article
Publication date: 28 September 2010

Katerina Gotzamani, Pantelis Longinidis and Fotis Vouzas

Logistics has become an essential service for synchronous companies. Many companies have recognized the potential benefits gained through a high quality system of…

Abstract

Purpose

Logistics has become an essential service for synchronous companies. Many companies have recognized the potential benefits gained through a high quality system of logistics services, which are provided either internally or externally by a third party logistics company (3PL). The 3PL is positioned between the company and its customers, in a new‐shaped logistics triad, having a crucial role in handling end‐customer information and feedback. Thus, service quality becomes one of the most important criteria for a decision to outsource logistics services and further to select a provider. This paper aims to evaluate the dilemma to outsource logistics services and the decision to select a provider based on quality management and financial performances criteria.

Design/methodology/approach

A survey instrument was provided to a sample of 66 manufacturing and 3PL companies. This instrument explored quality management issues and achievements in logistics services. Statistical inference tests and cluster analysis were employed in order to test the research hypotheses which were built and reflected the basic purpose of the paper.

Findings

3PL providers are ahead of manufacturing companies that operate logistics departments on quality implementation and improvement issues in logistics services. Furthermore, the research proved a positive relationship between quality performance and financial performance for 3PL providers.

Research limitations/implications

The research is based on a single country data. Further multi‐country studies will enable the generalization and validation of the findings.

Practical implications

The paper helps managers evaluate the logistics outsourcing dilemma in terms of quality management and quality service. Also the paper proves the strong relationship between effective quality management and sound financial performance for 3PL providers.

Originality/value

The paper presents substantive evidence supporting: the logistics services outsourcing decision based on quality management and performance criteria, and the importance of quality as a criterion to choose a 3PL provider, based on the positive relationship between effective quality management and financial performance for 3PL providers.

Details

Supply Chain Management: An International Journal, vol. 15 no. 6
Type: Research Article
ISSN: 1359-8546

Keywords

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Article
Publication date: 29 May 2007

Konstantinos Selviaridis and Martin Spring

To provide a taxonomy of third party logistics (3PL) research and, based on that, to develop a research agenda for this field of study.

Abstract

Purpose

To provide a taxonomy of third party logistics (3PL) research and, based on that, to develop a research agenda for this field of study.

Design/methodology/approach

The proposed 3PL research classification framework is based on a comprehensive literature review, which concentrates on peer‐reviewed journal papers published within the period 1990‐2005. A total of 114 academic sources have been retrieved and analysed in terms of research purpose and nature, method employed, theoretical approach and level of analysis.

Findings

The review reveals that 3PL research is empirical‐descriptive in nature and that it generally lacks a theoretical foundation. Survey research is the dominant method employed, reflecting the positivist research tradition within logistics. It identifies certain knowledge gaps and develops five propositions for future research. It suggests that focus should be directed towards more normative, theory‐driven and qualitative method‐based studies. It also argues that further empirical research in relation to 3PL design/implementation and fourth party logistics services is needed.

Originality/value

This paper fulfils an identified need for a comprehensive classification framework of 3PL studies. It essentially provides both academics and practitioners with a conceptual map of existing 3PL research and also points out opportunities for future research.

Details

The International Journal of Logistics Management, vol. 18 no. 1
Type: Research Article
ISSN: 0957-4093

Keywords

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Article
Publication date: 31 May 2011

Shams Rahman

Over the last two decades, a large number of studies have been conducted in the field of outsourcing third‐party logistics (3PL) services and the field is growing. The…

Abstract

Purpose

Over the last two decades, a large number of studies have been conducted in the field of outsourcing third‐party logistics (3PL) services and the field is growing. The purpose of this paper is to examine the extent to which 3PL services are outsourced by Australian firms. Specifically, it investigates the motivation for outsourcing, the average length of 3PL contracts, types of logistics services used and the impact of the use of outsourcing logistics services on customer satisfaction, logistics costs and employee morale of the user companies.

Design/methodology/approach

This study is based on a questionnaire survey conducted in Australia. The sample was drawn from companies listed in Dun & Bradstreet's 500 largest Australian firms. Banks and other financial firms, insurance companies and real estate companies were excluded from the list of firms and a total of 210 firms were identified for this study. Data were collected against a number of items pertaining to the extent of 3PL use and its impact on performance.

Findings

The results revealed that the most frequently used logistics functions are warehouse management, order fulfillment and fleet management. The top three factors that motivated the firms to outsource are cost reduction, reduction in capital investment, and enhanced operational flexibility. The level of satisfaction with 3PL service providers is high at 86 percent and is reflected in the indication to continue their use in the future. However, employee morale has been adversely affected in 50 percent of 3PL users.

Originality/value

The paper contributes to the current 3PL practices and the trends in 3PL services for achieving improved business results.

Details

Benchmarking: An International Journal, vol. 18 no. 3
Type: Research Article
ISSN: 1463-5771

Keywords

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