3PL Service Research Articles

Labor-Saving in Order Picking- A Real Time Study Advancing Lean Operations

Purpose: Efficient warehouse operations rely heavily on optimizing order picking processes, which are known to constitute a significant portion of overall operational costs. The aim is to enhance operational efficiency and cost-effectiveness by minimizing non-value-added tasks in warehouse operations. Materials and Methods: This study investigates the transition from an Assisted-Picker model to a Solo-Picker model at a prominent 3PL service provider in India. The analysis compares two approaches for picking orders—pairing laborers versus employing a Solo-Picker—using metrics such as travel time and picking time. Findings: Results reveal that while the Assisted-Picker model may initially show faster completion times for individual orders, the Solo-Picker model proves more efficient overall. This is attributed to the elimination of idle time associated with helpers and enhanced labor utilization efficiency. Real-time productivity data collected during the study period demonstrate a remarkable 44% increase in productivity with the Solo-Picker model, resulting in substantial Labor-Savings and significant reductions in operational costs. Implications to Theory, Practice and Policy: This study highlights the critical importance of reevaluating traditional labor allocation strategies in warehouse environments. By identifying and eliminating non-value-added work, warehouses can move closer to lean and efficient supply chain management practices, ultimately enhancing overall productivity and cost-efficiency.

Selection of third-party logistics in supply chain finance under probabilistic complex hesitant fuzzy sets and distance measures

Financial institutions attach great importance to the multiple attribute decision-making (MADM) problems of selecting an effective third-party logistics (3PL) service provider in supply chain finance. A suitable 3PL service provider can not only assist financial institutions in carrying out supply chain finance activity but can also replace financial institutions in supervising the operation of a target financing supply chain, therefore minimizing financial institutions' operating risks. However, there is no sufficient study on the selection of a 3PL service provider. Hence, the objective of this paper is to establish an innovative concept of the “probabilistic complex hesitant fuzzy set” (PCHFS), which is a hybrid structure of the complex hesitant fuzzy set and the probabilistic fuzzy set to manage complex information in real-decision theory. This paper examines the periodicity of probabilistic fuzzy information and extends the range from [0,1] to the unit disc in the complex plane to provide more ability to describe the full meaning of the information in a mathematical model. Based on the internal structure of the set and to find the degree of discrimination between the pairs of PCHFSs, the generalized distance measures and modified generalized distance measures are defined. Several properties and their relationships between them are derived in detail. Also, several cases of the proposed measures are exposed, which reduces them to the existing studies. Furthermore, based on these proposed measures, a multiple-attribute decision-making (MADM) approach is established in an uncertain environment, and several numerical examples are given to examine the feasibility and validity of the explored measures. Finally, the modified and parameterized distance measures based on PCHFSs are verified by comparing them with some existing measures.

The Improvement of Logistics Management in China: A Study of the Risk Perspective

This paper identifies and empirically validates the potential risks in overseas third-party logistics services that support sustainable cross-border e-commerce logistics in China. This research addresses a significant gap in the current literature by conducting a comprehensive literature review and case study, primarily focusing on third-party logistics services’ benefits without adequately discussing the associated risks. Our study highlights the medium and high risks in forwarding and contracting processes, such as cost uncertainty, quality issues, and cultural and language differences. The findings contribute to academic research and practical applications by providing a theoretical foundation and practical guidance for enhancing logistics management in China’s sustainable cross-border e-commerce. This research promotes the resilience and sustainability of cross-border e-commerce supply chains and offers valuable insights for overseas 3PL service providers looking to expand their operations in China.

Attitudes of 3PL Providers of the Companies towards the Activities of Organizational Performance

Businesses today specialize in their core competencies and outsource their other operations due to the emerging perception of competition brought on by the large-scale similarity of production, the quick spread of technology and information systems, and the disappearance of international borders. One of the most common fields of outsourcing activity is Third Party Logistics (3PL) service, and the Organizational Performance elements of 3PL service providers are listed as Service Quality, Relationship Management and Organizational Effectiveness. This research aims to examine the Organizational Performance criteria of the 3PL providers serving the production enterprises and to evaluate the relationship structure between the mean and standard deviation values of the statements in the survey. The empirical results obtained from frequency, regression and standard deviation analyses show that Guanxi, Reliability, Assurance, and Trust positively affect Organizational Effectiveness. However, only Trust has a positive and statistically significant impact on Service Quality

The impact of resource sharing on the design of multi-client warehouses

Third-party logistics (3PL) services are essential in many supply chains and aim at providing flexible and cost-effective transport and warehouse solutions. This study focuses on Warehouse Service Providers (WSPs) with shared, multi-client warehouses. We investigate how the main internal resources should be shared among clients. We focus on labor (order pickers and sorters) and pick storage space (zones) as the main internal resources in the order picking process in such a warehouse. We evaluate different possible resource-sharing configurations and develop a model to find the configuration that can satisfy set service-level agreements at minimum cost. The cost consists of labor and space cost, whereas the service-level requirements are based on the mean and tail of the order-throughput-time distribution. The results show that whether to share the resources or not highly depends on the clients’ characteristics, such as the order demand rate. Generally, for low-demand clients, sharing all the resources is optimal, whereas for high-demand clients, dedicating all resources is preferred. In addition, the decision to share resources depends on the warehouse’s characteristics, similarities between clients’ product and order picking characteristics. The findings of this article provide valuable insights for WSPs to minimize cost, while meeting the service-level requirements of clients by optimally selecting the warehouse configuration. This may, in turn, benefit their clients by offering better pricing policies to them, which can also be a compelling selling point, ultimately contributing to business growth and attracting more clients.

Model Development of Factors Affecting Intention to Use in Third-Party Logistics

The use of e-commerce in Indonesia driven by technological developments requires business people to maintain customer satisfaction and increase the intention to use. One of the services contributing to this is goods distribution services, usually assigned to Third Party Logistics (3PL). The increasing need for 3PL service providers results in the need for an elaboration of the factor model that influences intention to use. This study describes a conceptual model regarding the relationship between factors that influence customer satisfaction in 3PL. The results of this study are 10 variables, 38 indicators, and 11 hypotheses that can be used as a reference to determine the factors that influence intention to use in 3PL, as well as the steps for elaborating a model that can be used by the audience, in this case, 3PL service provider companies, to implement conceptual model in the appropriate case.

Research on the Network Equilibrium of Fresh Agricultural Product Supply Chain with Third Party Logistics Participation in Decision Making

Introducing Third-party logistics into the supply chain of fresh agricultural products can reduce the logistics cost of the supply chain and improve the freshness and quality of fresh agricultural products. Taking the fresh agricultural product supply chain network, which includes three decision-making entities: fresh agricultural product suppliers, 3PL service providers, and retailers, as the research object, a fresh agricultural product supply chain network equilibrium model is constructed using variational inequality theory. The impact of 3PL service providers' logistics service level on their equilibrium transaction volume and overall profit is studied. The research results show that when Third-party logistics is involved in the supply chain of fresh agricultural products, considering the logistics service level of 3PL service providers, with the improvement of service level, the overall profit of the supply chain of fresh agricultural products increases. It is a beneficial attempt to realize the profit of the supply chain of fresh agricultural products to improve the freshness and quality of fresh agricultural products through Third-party logistics; When the logistics service level rises to a certain level, and the service level continues to improve, the overall profit growth of the supply chain decreases. It is necessary to improve the impact of logistics service level on the freshness and quality of fresh agricultural products through other forms.

Development and Practical Application of Hybrid Decision-Making Model for Selection of Third-Party Logistics Service Providers

Abstract In this study a problematic of logistics service provider selection is discussed. Traditional decision-making techniques are functionally limited and must be adjusted. Modern approach must be based on contemporary tools and information. The aim of this study is to develop a modern, industry-oriented decision-making model for selection of strategic logistics service providers. Main tasks of this study include: to perform critical analysis and comparison of multiple-criteria decision-making methods; to adapt decision-making framework for specific needs of selection of third-party logistics service providers; to collect and analyze industry data related to procurement projects; to develop modern decision-making model for selection of logistics service providers; to perform practical application of developed decision-making model based on collected industry data. The key novelties of this study are developed methodology for collection of industry data for decision-making process, developed hybrid decision-making model for selection of third-party logistics service provider, as well as application of the model. As the result, there is developed decision-making model for selection of 3PL service providers that includes 6 steps.

Orgatma – the 3PL challenge

Learning outcomes This case study would help students in understanding the dynamics of logistics and logistics vendor roles and contributions to overall business operations. The case study covers real-time information for applying the theoretical knowledge students gain related to the selection of logistics vendor. It would help students to understand and evaluate the dynamics of a new start-up related to cost, profits and dependency; understand and analyze the importance of third-party logistics (3PL) service providers in the supply chain; become aware of the key performance indicators (KPIs) important in the selection of logistics vendor; and develop and create measures for selecting logistics vendors on the basis of KPIs. Case overview/synopsis This case study was about an innovative start-up operating in the field of organic edible oils. The company catered to end consumers with its indigenous technology and processes. The innovative and healthy products were appreciated by the consumers, as was reflected in the surging demand figures. With the increasing popularity of organic products, the orders were surging. At the same time, issues such as damaged product delivery, increased cost per delivery of small packages and failure to deliver because of unserved pin codes by their logistics partners were being faced by the company. The case discusses the dilemma faced by the protagonist regarding the selection of the right 3PL partner. The case study is suitable for teaching courses in operations and logistics, supply chain management and entrepreneurship-related courses. Complexity academic level This case study is appropriate for postgraduate courses in entrepreneurship, operations management, logistics and supply chain management and general management. Supplementary materials Teaching notes are available for educators only. Subject code CSS9: Operations and logistics.

Determining Factors for Supply Chain Services Provider Selection and Long-Term Relationship Maintenance: Evidence from Greece

Background: Due to increased globalization and its subsequent rise in competitiveness, the role of supply chain services (3PL) in managing logistics, reducing operational and non-operational costs, and managing customer and supplier relationships, have become of utmost importance. Customer-centric production has led to the development of a close relationship between production processes. Amidst all this, the demand for logistic services has dramatically increased, thus putting more pressure on firms for enhanced operational results, and leading to the outsourcing of their internal and external logistic activities. On the other hand, supply chain firms that provide 3PL services seek to enhance their sustainability and predict their customers’ demand. Methods: The authors collected quantitative data from 81 firms that operate in various industrial sectors in Greece. A questionnaire was sent for completion, in which firms could rate and evaluate various aspects that were discerned as important for deciding to cooperate with a 3PL service provider and maintain this cooperation in the long run. To extract the required outcomes, statistical analyses like categorical regression (CATREG) and MANOVA were utilized. Results: The demand for 3PL services was affected by 3PL service providers’ operational performance based on accuracy, reputation, and IT capabilities, while the customer firms’ intention for maintaining cooperation with 3PL service providers was affected by their reliability level, improved service efficiency, and trustworthiness. Conclusions: 3PL service providers should seek to improve the reputation, IT infrastructure, and accuracy of their firm's operations to have a continuous demand for their services. Apart from that, 3PL service providers to maintain the cooperation with their customers, need to enhance the levels of their services reliability and efficiency, while also creating a bond of trust with their existing customers.

Distribution Channel Selection Using FUCOM-ADAM: A Novel Approach

The selection of the appropriate distribution channel is crucial for the success of any business dealing with physical goods. When dealing with this selection, it is crucial to have an effective decision support system (DSS) that can assist with such decisions. While various DSS approaches exist in the literature, not all are suitable for real-world applications. This research aims to address this gap by developing practical DSS tools that can aid decision-makers in making optimal decisions even in situations of uncertainty. The paper explores six different distribution channels (retailer’s warehouse, wholesaler’s warehouse, manufacturer’s warehouse, cross-dock, 3PL services, and direct delivery) in order to select the optimal one based on nine established criteria (inventory costs, distribution costs, delivery speed, service level, market coverage, product availability, order consolidation capability, reverse logistics, and order tracking) by using the FUCOM (Full Consistency Method) and ADAM (Axial-Distance-Based Aggregated Measurement) methods. After applying the FUCOM method, C1 (inventory costs) had the highest value when observing criteria weights, whereas C9 (order tracking) had the lowest. The results of the ADAM method showed that A5 (3PL services) was the best-ranked alternative, whereas A4 (cross-dock) was ranked as the worst. Based on the results, a model validation, and sensitivity analysis was conducted to determine whether the final ranking of the alternatives will change. This research provides decision makers with the necessary tools for better decision making, leading to improved distribution operations and increased profitability for the business.

Using Simulation to Determine Resource Requirements for Outsourcing Outbound Logistics Process

Outsourcing has become an important approach for organizations to improve their focus on core business and thus increase their performance since 1980s (Madsen, 2017). Many organizations outsource non-core activities with the intention to reduce costs, concentrate on core activities, gain access to skilled workforce, and etc. Logistics activities are one of the popular functions for organizations to outsource due to lack of skill and resources. Nowadays, outsourcing logistics activities is becoming a practice worldwide (Yang, 2014). Logistics outsourcing has proven to be an effective way for organization to improve customer services, reduce logistics costs, and gain competitive advantage (Aguezzoul, 2014; Jonsson, 2008; Kamble and Gawankar, 2016). This results in an emerging of 3PL or Third-party logistics provider, an external logistics service provider offering single or multiple logistics activities to its customers, which typically is on contract basis (Yang, 2014). The global 3PL market reached $750 billion in 2014. 80% of all Fortune 500 companies and 96% of the Fortune 100 used some form of 3PL services (Menner, 2015). Despites the benefits, there are some risks associated with loss of control, long-term commitment, and the failure of 3PL to perform their works. Therefore, it is crucial for a company to invest time during initial stages of the outsourcing relationship to ensure value is achieved throughout the process. Keywords: Outsourcing, Simulation Modelling, Contract Management, Resource Requirements, Resource Allocation

If you don't care, I will switch: online retailers' behaviour on third-party logistics services

PurposeThe issue is which third-party logistics to engage, and escalating customer complaints about service quality of third-party logistics (3PL) enhances the tendency of online retailers to switch to another 3PL. The current study seeks to investigate the factors influencing the satisfaction and switching intention of 3PL services among online sellers in Malaysia.Design/methodology/approachApplying a purposive sampling method, data were gathered via an online survey among online sellers. Initially, the system gathered 418 respondents, but only 311 were useable for further analysis. Since we operationalised the measures as composites, a combination of reflective and formative measurement in the study and the study focuses on explanatory and predictive purposes, partial least squares structural equation modelling with SmartPLS 4 was applied to test the model developed.FindingsThe results indicated that conflict handling had a positive effect on satisfaction, and satisfaction had a negative relationship with the switching intention of 3PL among the online retailers. Moreover, satisfaction and customer relationship management sequentially mediated conflict handling and switching intention, whereas CRM strengthens the negative relationship between satisfaction and switching intention.Research limitations/implicationsThe respondents only limit to the online sellers in Malaysia which based on purposive sampling method, thus the findings cannot be generalised to another countries.Practical implicationsThe study offers insightful information for the managers of the 3PL in crafting a better policy to avoid switching behaviour among their customers. The conflict between customers and providers is unavoidable since consumers have unlimited demand and businesses have limited resources. The findings also benefit online sellers and 3PL service providers to create attractive marketing strategies for business sustainability.Originality/valueThe study developed a new model for the 3PL studies using the S-O-R model in introducing conflict handling and customer relationship management as the stimulus, customer's satisfaction as an organism and switching intention as a response. The study introduced single and sequential mediators also contributes to the S-O-R theory to predict the switching intention among the online sellers towards the 3PL providers. Another important contribution, customer relationship management, was confirmed to play a moderating role to influence the relationship between satisfaction and switching intention.

Economic or relational first? Establishing the competitiveness of third-party logistics information sharing by devoting specific assets and mutual trust

Third-party logistics (3PL) information sharing has been widely acknowledged as a critical mechanism for integrating user and provider firms. However, it is not known what the different roles of operational and strategic information sharing are and the types of economic and relational investments required. This study empirically examines the effects of specific assets of providers and users and mutual trust on operational and strategic information sharing and financial performance. We used survey data from 247 3PL user firms to examine the conceptual model. The results show that strategic information sharing increases financial performance, but operational information sharing does not. Users’ specific assets do not directly stimulate either type of information sharing, while providers’ specific assets increase strategic information sharing and bridge the relationship between users’ specific assets and operational and strategic information sharing. Mutual trust directly increases operational and strategic information sharing and plays an intermediate role in the relationship between specific assets and information sharing. Our study provides a comprehensive understanding of 3PL information sharing and practical guidelines for deploying economic and relational investments for 3PL service improvements in emerging markets.

Development of an improvement framework for warehouse processes using lean six sigma (DMAIC) approach. A case of third party logistics (3PL) services

This study aims at developing an improvement framework of warehouse processes by improving process cycle efficiency using lean six sigma (DMAIC) approach.A case study method was used to illustrate the evaluation of the existing processes in the warehouse of a third party logistics company with a focus on productivity using warehouse lean tools. Data were collected based on warehouse operational areas of suppliers, customers and internally related with a focus on warehouse core processes. The optimization of the warehouse processes was based on established lean tools.Based on the warehouse evaluation, high non-value added activities were observed leading to a low process cycle efficiency of 40%. After the implementation of the lean six sigma approach, the process cycle efficiency improved of up to 70%. An improvement framework was also established for productivity across the warehouse processes to minimise waste.Lean warehousing has been used to illustrate solutions to a real-time problem of productivity which has negatively impacted on management and customer satisfaction.The study has added to lean warehousing focusing on all the warehouse processes using six sigma DMAIC approach, unlike most literature which concentrates on a specific process. Also develop a framework for the improvement of the processes.

Analysis of Warehouse Value-Added Services Using Pareto as a Quality Tool: A Case Study of Third-Party Logistics Service Provider

The study aims to analyse warehouse value-added services (VAS) data for a third-party logistics (3PL) service provider, which leads to identifying service improvements and cost-cutting opportunities in performing VAS for clients using Pareto analysis as a quality tool. Using a case study approach, qualitative and quantitative data were collected from a leading 3PL firm in Belgium. The approach is conducted by applying major steps of Pareto analysis. Two pharmaceutical products were analysed according to medical general classification, namely narcotic analgesics (NA) and ophthalmic antihistamines and decongestants (OAD). The results showed that the Pareto principle is proven in the NA—ticketing case, and five activities consumed 83.3 percent of the total time of VAS operations. Furthermore, in the OAD—display case, the Pareto principle is proven and six activities were validated as they accounted for 81.26 percent of the total time of primary VAS operations. The study recommended a solution to each of the four causes of delay, including lack of training/best practices, inefficient space utilization, lack of automation, and lack of cohesiveness and planning. Despite the recognized importance of avoiding warehouse operation inefficiencies, the literature lacks studies applied to practice, and few contributions exist regarding analysing 3PL service providers’ warehousing VAS operations data. This study identified all VAS activities for temperature-controlled pharmaceutical products. Moreover, the study proposes a warehouse operations improvement framework for non-automated 3PL warehouses and guides managers through Pareto analysis to cut costs and improve service level.

Multiple allocation hub location with service level constraints for two shipment classes

In this paper, we study a hub network design problem arising in the context of a third-party logistics (3PL) service provider, which acts as an intermediary between shippers and carriers. A 3PL service provider usually caters to different classes of shipments that require different levels of service, e.g. two-day delivery, next-day delivery etc. We, therefore, study the problem under stochastic demand from two classes of shipments, with one class receiving priority over the other in service at the hubs to maintain the different service levels required by them. To this end, we present two models for designing a capacitated hub network with a service level constraint, defined using the distribution of time spent at hubs, for each shipment class. The models seek to design the hub network at the minimum total cost, which includes the total fixed cost of equipping open hubs with sufficient processing capacity and the variable transportation costs. The network of hubs, given their locations, is thus modeled as spatially distributed priority queues. The resulting model is challenging to solve, for which we propose a cutting plane-based exact solution method.

Significance Ranking of Logistic Performance Indicators Expected From 3PL Service Providers According to Entropy and Critic Methods

Bu araştırmanın amacı firmaların 3PL hizmet sağlayıcılarda dikkate aldıkları lojistik performans göstergelerinin önem düzeylerinin sıralamasının ikincil verilere (sektör, büyüklük, sermaye yapısı ve bölge) göre farklılaşan ya da benzeşen noktalarının ihracatçı firmalar bakış açısından belirlenmesidir. Çalışmada 2017 yılı Türkiye’nin ilk 1000 ihracatçı firmasından, anket yöntemi ile veri toplanmıştır. 33 göstergeden oluşan lojistik performans göstergeleri 6 boyut altında toplanmıştır. Buna göre birinci boyut “ilişkisel-teknolojik yeterlilikler ve müşteri memnuniyeti performans göstergeleri”, ikinci boyut “katma değerli hizmetler performans göstergeleri”, üçüncü boyut “sevkiyat ve yükleme işlemlerinin etkinliği performans göstergeleri”, dördüncü boyut “gelişime ve inovasyona yönelik performans göstergeleri”, beşinci boyut “ulaştırma operasyon performans göstergeleri” ve altıncı boyut “sipariş işleme performans göstergeleri” olarak adlandırılmıştır. ENTROPİ ve CRITIC yöntemleriyle elde edilen lojistik performans göstergelerinin önem düzeyleri karşılaştırıldığında, firmaların 3PL hizmet sağlayıcılardan beklentileri farklılaşmakla birlikte genel olarak ulaştırma operasyonu ile sevkiyat ve yükleme işlemlerinin etkinliği ile ilgili beklentilerinin olduğu görülmüştür.

Blockchain and third-party logistics for global supply chain operations: Stakeholders’ perspectives and decision roadmap

In global supply chains, third-party logistics (3PL) services have proven to be critically important in helping many supply chain agents with distribution tasks so that they can focus on their core competencies of product development and manufacturing. However, there are many inadequacies in current global supply chains that affect the functions of 3PL. These shortcomings have necessitated digital transformation in many businesses. This digitalization enhances information sharing and supply chain visibility, which improves supply chain performance; however, it may create challenges regarding cybersecurity and data quality. Blockchain technology (BCT), with features such as being highly secure and distributed, can help. In this paper, we examine the literature and identify challenges associated with 3PL and how BCT can be used for 3PL. Then, we conduct interviews with four innovation/project managers of well-established logistics companies to uncover the status of BCT adoption in 3PL and the challenges that are hampering the adoption of this technology. Finally, we propose a framework together with a decision roadmap for BCT implementation.

Digitalization and third-party logistics performance: exploring the roles of customer collaboration and government support

PurposeThe authors investigate how logistics digitalization affects two types of third-party logistics (3PL) performance: financial performance and service performance. In particular, the authors explore the mediating role of customer collaboration between logistics digitalization and firm performance based on organizational information processing theory and examine the moderating role of government support.Design/methodology/approachThe authors use an SPSS macro program (PROCESS regression analysis) to analyze survey data from 235 3PL firms in China. The mediation model, moderation model and moderated mediation model are tested.FindingsThe empirical results show that in the new age of digitalization transformation, logistics digitalization positively affects 3PL's financial performance and service performance by strengthening customer collaboration. Additionally, government support amplifies the positive effect of customer collaboration on service performance but not financial performance. The moderated mediation test further indicates that government support strengthens the positive indirect effect of digitalization on service performance through customer collaboration.Originality/valueThis study offers empirical insights into the growing body of 3PL literature, and the findings contribute to the theoretical and practical understanding of the emerging research topic of digital transformation (DT) and sustainability issues in 3PL firms.