Third-party Logistics Service Providers Research Articles

Research on Member Decision-making of Dual-channel Supply Chain with TPL Participation

With the development of the Internet, more and more enterprises choose the dual-channel supply chain for the sale of goods, in which the third-party logistics service provider plays an important role. By adopting the modified hotelling model, this paper constructs a three-level two-channel supply chain model, discusses the influence of centralized and decentralized decision-making on the decision-making of supply chain members, and puts forward corresponding management suggestions.

Freshness-keeping effort vs. sustainability: an efficient approach for perishable supply chain system

Last few decades, unwanted climate change and global warming have forced us to think about the world environment. This paper investigates a perishable supply chain system consisting of one manufacturer, one third-party logistics service provider, and multiple retailers. The logistics provider and retailers use cooling technologies to maintain the product's freshness. Here, consumers' demand is evaluated from the utility function based on price, freshness, and sustainability level. The environmental impacts of the system are measured from the amount of energy consumption and carbon emission. Also, the supply chain members are taking their decisions in cooperation, non-cooperation, and coordination decision scenarios to maximise their profit and reduce total environmental impacts. We develop a general model and a particular model under different decision scenarios. The optimal sustainability level, price, and freshness-keeping-effort (FKE) are derived using the Stackelberg game theory. A numerical experiment as well as sensitivity analyses of various important parameters are conducted. It explores that (i) FKEs have more impact than the sustainability level for the consumption of perishable products. (ii) The retailer-leadership scenario is the most effective for reducing carbon emissions and energy consumption whereas the cooperative decision scenario is better for maintaining the freshness level.

Automatic model generation for material flow simulations of Third-Party Logistics

AbstractThe use of Third-Party Logistics (TPL) is a common practice among manufacturing companies seeking to increase profitability. However, the tender process in selecting a TPL service provider can be challenging, requiring significant effort from both the tendering company and the service provider. The latter must meticulously plan processes and calculate pricing positions while running the risk of losing the bid. This risk impedes verifying logistical feasibility and comparing different logistic concepts extensively, such as layouts, which are often work-intensive. With the ongoing progress of research toward automatic simulation model generation for material flow, it is left to answer whether such approaches can improve the planning processes of TPL service providers by using planning data to generate simulation models. Therefore, this work presents a system with an underlying ontology to generate material flow simulations by developing a model transformation methodology. The system’s functions are tested to determine whether they can support the planning process using defined case studies that cover everyday planning decisions. As a result, the system is capable of verifying the performance of planned logistic systems with minimal manual modelling efforts. This encompasses the evaluation of alternative logistical concepts for configuring the planned systems.

Evaluation of third-party logistics service providers for car manufacturing firms using a novel integrated grey LOPCOW-PSI-MACONT model

Automotive businesses often delegate logistical tasks to third-party logistics (3PLs) service providers to acquire a competitive edge in the dynamic market. Nevertheless, selecting the most suitable third-party logistics (3PL) partner is a multifaceted undertaking that needs careful evaluation of several criteria and alternatives. This research aims to introduce an integrated grey Multiple Criteria Decision Making (MCDM) framework for automotive businesses to deal with the multidimensional 3PL selection decision problem. This framework incorporates an enhanced Preference Selection Index (PSI), Logarithmic Percentage Change-driven Objective Weighting (LOPCOW), and Mixed Aggregation by Comprehensive Normalization Technique (MACONT). The LOPCOW-G and grey PSI (PSI-G) methods extract the criterion weights, whereas the MACONT-G method ranks the alternatives. The suggested framework's practicality is shown by conducting a case study about evaluating and selecting a third-party logistics (3PLs) provider. The findings indicate that the parameters of significant importance are “skilled workforce (0.0977),” “financial strength (0.0901),” and “IT-IS competence (0.0839).” Furthermore, TPL4 has been recognized as the most optimum option with a value of 0.4797. The MACONT-G model is as well compared against other grey MCDM techniques to assess the validity of the proposed model. The Pearson correlation coefficient between MACONT-G and the other models based on grey sets is 0.958, suggesting a significant and positive link. Furthermore, it is worth noting that a sensitivity analysis has been conducted to validate the accuracy and reliability of the created framework. In conclusion, this study has identified managerial and policy implications that might assist policymakers and executives in effectively evaluating 3PL providers.

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.

Evaluation of the sustainability of party logistics service providers with failure modes and effects analysis method: its application in a company

Purpose- The purpose of this research is to increase customer satisfaction and business performance in the sector to eliminate failure situations of the processing phases of the departments of the business and to develop the quality of the system. The objective of this research is to enhance customer satisfaction and business performance by addressing and eliminating failure situations in the processing phases of the business departments and improving the quality of the system. To achieve this, the study focuses on evaluating third-party and fourth-party logistics service providers in the context of sustainability. While there are existing approaches to evaluate party logistics under general headings, there is a lack of specific studies focusing on companies operating in a single field. Therefore, this study aims to fill that gap by examining the business evaluation criteria of third-party and fourth-party logistics service providers for a white goods company in Turkey. Methodology- During the research, the concept of third-party logistics has gained attention within the scope of sustainability, the competition among organizations providing this service has become more intense, as have customer expectations. The research utilizes Failure Mode and Effects Analysis (FMEA) and Pareto Analysis (PA) to assess the sustainability of the supply chain and batch logistics for the company. Findings- As a result of the research, the findings in the direction of quality improvement-development within the scope of the service provided by the business are presented. The initial phase of process enhancement for logistics operations begins with the FMEA results. Development initiatives may begin if improvement initiatives are maintained. Development activities and resources ought to be distributed in accordance with this level of priority with regard to the first work that has to be performed to enhance the process. Conclusion- All risk considerations might not be realized inside a particular process since there are only a limited number of possibilities to be assigned for enhancement prosperity. By conducting risk prevention studies in accordance with the priorities that will be decided upon each period, it is intended to produce continuous improvement. Overall, while it may not be possible to address every risk, prioritizing risks and conducting risk prevention studies can help organizations achieve continuous improvement and increase their chances of success. Keywords: Failure Mode and Effects Analysis (FMEA), Pareto Analysis (PA), party logistics, quality, supply chain, sustainability. JEL Codes: 030, N01, L15, L21, L84

Dynamic modelling of cold chain logistics services under budget constraints for the delivery of fresh products in an urban area

The quality of perishable products declines continuously during the transportation process, rendering the delivery of a product with good freshness a challenging task in urban areas. We investigate how to plan activities to preserve the freshness level of products within a specific distance range. To this end, we construct an analytical model consisting of an online retailer and a third-party logistics service provider that loads the product from the retailer's fulfillment center and delivers it to various destinations with cold-chain logistics operations. The retailer seeks an appropriate balance between the delivery of good freshness, the farthest distance of delivery, and a limited budget for cold-chain logistics. We derive the optimal size of the area in which the freshness of products is maintained to the maximum possible level and the farthest distance that the retailer should consider when fulfilling online orders. This study includes three scenarios: in-house operation, outsourcing, and a hybrid mode. In outsourcing, the retailer pays a service fee based on the number of orders fulfilled within a specific area. The primary finding is that the retailer can choose an appropriate combination of the service fee rate and budget to control the scale of the area that guarantees good freshness. This finding has managerial significance, in that the ability to accurately predict and control the freshness by the distance range can reduce the occurrence of customers complaining about the quality of the delivered products.

Logistics collaboration in vehicle manufacturing: case studies with a triadic perspective

ABSTRACT This paper discusses logistics collaboration applied to a vehicle-manufacturing setting. We reach out to a larger segment of the supply chain by employing a novel unit of analysis, a logistics triad. The triad encompasses an Original Equipment Manufacturer, a Third-Party Logistics Service Provider, and first-tier suppliers. We use the framework known as Collaborative Transportation Management (CTM) to study collaborative transportation activities, focusing on the important relationship between logistics collaboration and logistics performance. Using a qualitative research orientation and a multi-case research strategy, we interviewed logistics practitioners in three countries to identify the enablers of CTM, the salient collaborative practices, and the performance outcomes. The study uncovers the extent to which CTM contributes to the operational and relational performance of the logistics triad. We provide empirical evidence of an ad hoc implementation of this notion. We propose avenues of intervention to preserve logistics collaboration and to enhance logistics performance.

Freshness-Keeping Strategy of Logistics Service Providers: The Role of the Interaction between Blockchain and Overconfidence

As a result of the increasing scrutiny of fresh products, greengrocers are now forced to concern themselves with the deterioration of their products’ freshness and employ blockchain technology as a tracing system. However, in the logistics system, the third-party logistics service provider (LSP) is motivated to be overconfident in order to extract extra profits, thus intensifying the dilemma faced by the fresh agricultural product industry. This paper focuses on the association between blockchain technology and overconfidence, in which the third-party LSP is supposed to overestimate the effect of the retailer’s freshness keeping measures. Differing from the previous literature, we analyze a situation wherein blockchain technology is adopted with explicit execution. Based on the optimal control model, we obtained three main conclusions: First, the overconfidence of a third-party LSP does not damage the logistics system but changes the freshness-keeping strategy of the retailer. Second, interestingly, although blockchain technology performs effectively when it is adopted as an initially established system with a freshness keeping strategy, it is not always a wise decision for managers to adopt a blockchain, especially when adopting it as a countermeasure for overconfidence. Third, we found that blockchain technology has a greater effect on freshness-keeping than overconfidence. Thus, in the fresh agricultural product industry, managers should adopt blockchain technology before overconfidence occurs and pay more attention to exogenous prices and freight to decide whether to adopt blockchain technology.

Managing disruptions and strategy development during Covid-19 pandemic: the perspective of third-party logistics service providers (3PLs)

ABSTRACT The Covid-19 pandemic forced many companies to alter and improve their logistics activities as part of their business logistics strategies, to obtain cost and service advantages. In this regard, to lessen the detrimental effects on the business environment, it is critical to develop different strategies according to the nature of the disruptions and uncertainties. This paper explores uncertainty sources confronted by third-party logistics service providers (3PLs), identifies disruptions, reveals the resources used to cope with these and develops strategies for the Covid-19 pandemic. Drawing upon Resource Orchestration Theory (ROT), we reveal the important role of resource allocation in logistics and supply chains (SCs). This study proposes a conceptual framework that describes resources which can be used for strategy development in the face of uncertainties. In terms of managerial implications, this study extends knowledge in the field by providing insights enabling 3PLs to improve their capabilities and increase their performance.

Logistics Service Selection Strategy of Green Manufacturers in Green Low-Carbon Supply Chain

In order to analyze the logistics service mode and sales mode selection strategy, a green low-carbon supply chain consisting of a single manufacturer and a single e-commerce platform is considered. First, in the green low-carbon supply chain which consists of a direct selling channel and reselling channel, the selection strategy of the manufacturer's logistics service mode is analyzed. Second, in the green low-carbon supply chain which consists of a direct selling channel and an agency channel, the selection strategy of the manufacturer's logistics service mode is analyzed. Last, the manufacturer's sales mode is analyzed. We use the backward induction method to solve the theoretical model. This study contributes to the literature by considering the optimal decision of a green low-carbon supply chain. This study brings together the literature from streams on the selling channel selection strategy in green supply chains and the logistics service strategy in green supply chains. The impacts of the logistics service cost, the selling cost, and the green input cost coefficient on the optimal decision and the firms' profit are discussed. The result shows that in the direct selling channel and reselling channel, when the basic market demand and the logistics service level of the third-party logistics service provider are low, manufacturers will choose the e-commerce platform logistics service; in the opposite case, manufacturers will choose the third-party logistics service. In the direct selling channel and agency channels, when the logistics service level of the third-party logistics service provider is greater than or equal to a certain critical value and less than or equal to the logistics service level of the e-commerce platform, manufacturers will choose the e-commerce platform logistics service; in the opposite case, manufacturers will choose the third-party logistics service. No matter whether the manufacturer chooses the logistics service provided by the third-party logistics service provider or the logistics service provided by the e-commerce platform, the manufacturer should choose the direct selling channel and the agency channel.

Research on the Coordination of Fresh Food Supply Chain Based on the Perspective of Blockchain and Low Carbon

We consider a three-stage fresh agricultural product supply chain consisting of a supplier, a third-party logistics service provider (TPLSP), and a retailer and discuss the coordination mechanism of “revenue sharing + double cost sharing” contracts and “two-part tariff + revenue sharing + double cost sharing” contracts between the supplier, TPLSP, and the retailer. Based on this, we not only explore the conditions for supply chain full coordination and Pareto improvement but also analyze the effect of blockchain technology application cost, consumer environmental protection awareness, freshness preference, green trust level on carbon emission reduction level, fresh-keeping effort level, price decisions, and profits by comparing three different decision-making models. Results show that the improvement of the green trust level can help to improve the carbon emission reduction level, fresh-keeping effort level, price decisions, and profits. The application of blockchain technology can reduce transaction costs and improve consumer green trust levels, thereby increasing market demand and profits. When environmental protection awareness and freshness preference are higher than a certain value, the unit retail price of fresh products under decentralized decision-making is the highest with the blockchain technology applied. TPLSP can increase the wholesale, service, and retail prices of fresh products by appropriately increasing the blockchain technology application cost-sharing ratio. When 15 < T 1 < 29.2416 and 47 < T 2 < 66.0408 , “two-part tariff + revenue sharing + double cost sharing” contracts can achieve the Pareto improvement.

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.

Optimal Preservation Effort and Carbon Emission Reduction Decision of Three-Level Cold Chain System with Low-Carbon Advertising Effect

To solve the problems of the impact of carbon emission reduction and low-carbon advertising on the supply chain of fresh agricultural products, a three-level low-carbon supply chain system composed of a manufacturer, a retailer and a third-party logistics service provider is taken as the research object. The profit functions of each party under the three contracts of the manufacturer bearing, the retailer bearing and the two parties jointly bearing the advertising cost are, respectively, established to solve the optimal pricing, advertising level preservation efforts, service levels and carbon emission reduction decisions. The numerical analysis shows that, with the increase in wholesale price and the decrease in fresh-keeping price coefficient and low-carbon cost coefficient, manufacturers will choose better fresh-keeping effort level and low-carbon service level. When the proportion of advertising cost borne by the supplier increases, the benefits of all parties in the supply chain will decrease; however, when the retailer bears the advertising cost alone, the profit of the supply chain system is the largest.

Impacts of blockchain-based digital transition on cold supply chains with a third-party logistics service provider

Blockchain is a driver for digitalization in the fresh industry, but the resulting improvements in each supply chain member’s performance are difficult to predict. In this study, we examine the effects of blockchain-based digital transition in a cold supply chain with a manufacturer, a retailer, and a third-party logistics service provider (3PL). Our study provides several managerial implications. First, blockchain adoption would lead to a preservation service level increase if the 3PL charges a low transportation fee, but a preservation service level decrease if the 3PL charges a high one. Second, the blockchain adoption may induce the manufacturer to increase its wholesale price, which does not cause the retailer to cut the order quantity but instead sets a lager one. Third, our results indicate that simply relying on the market mechanism may not enable the cold supply chain to make the optimal decision; thus, government intervention or an exogenous coordination mechanism must be introduced to drive the cold supply chain members to reach a consensus on blockchain-based digital transition. Finally, the main results in the basic model are proven to remain robust. Managerial implications are discussed and provided.

Hub and Distribution Center Location for a Third-Party Logistics service Provider: A Case Study at Tehran

The rapid growth of the transportation industry and the advance of the e-commerce have opened opportunities for boom delivery services companies. Although, intense competition between shipping companies has obliged many to amend their shipment networks. In this setting, we aim to provide high-quality shipping services for a third-party logistics company in Iran. Currently, in the selected company, one hub is in the west part of Tehran that gives services to all customers. There are some difficulties in shipping services to the eastern part of Tehran city. Therefore, in this paper, we find the location of another hub center to streamline the shipping process. Moreover, to promote our service levels, some Distribution Centers (DCs) are going to be set up. Due to the lack of shipment data like pick up and delivery data, we tried to find the locations of the hub and the DCs based on Tehran population's data. We clustered 122 regions of Tehran based on population, economic index, accessibility to the internet, and the number of business units. Since some remote regions (which are not in the same vicinity) belong to the same cluster, we defined a relative distance criterion to avoid making remote regions in the same cluster. In each cluster, a fixed or movable DC can be set up to service the regions of its cluster. Moreover, to find the best candidate locations for the hub, each zone of Tehran was assessed based on some criteria like land cost, accessibility to the highways, and distance to its nearest bus terminal. Based on these criteria, some zones have been dominated by others, and the remains were considered as candidate locations in a hub location model. By considering the DCs as spokes in a hub and spoke model, the optimal location for the eastern hub establishment was determined.

Blockchain adoption decision analysis of fresh supply chain considering 3PL's misreporting behavior

In fresh supply chain, the third-party logistics service provider (3PL) has incentive to misreport its private information such as preservation service effort level and logistics transportation cost for the sake of gaining competitive advantage in the market. A tamper-proof and traceability system supported by blockchain technology (BCT) can prevent 3PL from misreporting. In this paper, we investigate the BCT adoption decision of a fresh supply chain consisting of a manufacturer, a retailer, and a 3PL when the 3PL misreports its private information. Specifically, we conduct four models: without BCT adoption and 3PL misreports its preservation service effort level (Model NE), without BCT adoption and 3PL misreports its logistics transportation cost (Model NC), without BCT adoption and 3PL misreports both preservation service effort level and logistics transportation cost (Model ND) and with BCT adoption and no misrepresentation (Model AB). By calculating the models, our study indicates that when the 3PL underreports its fresh-keeping service effort level and the degree of underreporting is high or when the 3PL overreports its logistics transportation cost and the degree of overreporting is high, all fresh supply chain members will reach an agreement on implementing BCT. However, when the 3PL misreports its fresh-keeping service effort and logistics transportation cost simultaneously, the BCT adoption decision is influenced not only by the misreporting coefficient of logistics transportation cost and preservation service effort, but also by logistics transportation cost. Finally, as logistics transportation cost increases, the manufacturer and retailer are reluctant to adopt BCT, while the 3PL is willing to adopt BCT.

Breaking truck dominance in supply chains: Proactive freight consolidation and modal split transport

Environmental concerns and a shortage of truck drivers motivate a paradigm shift in truck-dominated supply chains. To alleviate the pressure on truck transport, one can consolidate freight with other companies. Freight consolidation can be facilitated by third-party logistics service providers, who combine shipments that require delivery to the same destination on the same day. More gains can be realized through “proactive freight consolidation”, by proactively synchronizing the timing of shipments prior to placing orders. This is facilitated by a joint replenishment policy. The truck intensity of supply chains can be further reduced by shifting freight from road towards alternative transport modes, such as train. Modal split transport combines two complementary transport modes by using both modes in parallel. We analyze how proactive freight consolidation can be combined with modal split transport. We propose a heuristic that combines a can-order joint replenishment policy to consolidate freight orders proactively via truck, with a tailored base-surge policy to coordinate shipments via train. We develop a lower bound on the optimal cost to validate our heuristic. By comparing the truck usage and cost performance of our policy against alternative replenishment strategies, we show how the combination of proactive freight consolidation and modal split transport can shift freight towards alternative transport modes, without negatively impacting costs or service.