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  • Essay / The pros and cons of using third parties...

    In order to improve operational efficiency, many companies have chosen to outsource part or all of their logistics activities to third parties. By doing so, the company can focus more on its core activities. Green, Turner, Roberts, Nagendra, and Wininger (2008) found that third-party logistics (3PL) companies typically offer services covering warehousing, distribution, inventory control, packaging, and transportation, such as contracting and transportation procurement, inventory management. , logistics consulting and management, freight auditing and consulting, shipment tracking and tracing, and offering reverse logistics and other value-added services. The disadvantage of 3PL is the loss of control in some supply chain activities, but it is overcome by the main advantage - 3PL domain knowledge and expertise.2.3. Supply Chain CollaborationIn recent decades, companies have explored how they could collaborate with their customers and suppliers to ensure that the supply chain is efficient and responsive to current market needs (Fawcett and Magnan, 2004; Lejeune and Yakova, 2005). . Mutual dependence in today's global market has become so great that an organization cannot achieve the required level of efficiency alone (Mehrjerdi, 2009). Collaboration involves developing strategies in which two or more independent external or internal actors playing different roles in the supply chain achieve their common goal in a competitive environment. These goals generally cannot be achieved by working separately. (Kumar and Banerjee, 2012). We can therefore conclude that collaboration in the supply chain is vital to gain competitive advantage and improve business processes.Managing the supply chain...... middle of paper ......number of value-added services, strategic logistics services and know-how and ability to advise on innovations and improvements (Bajec & Zanne, 2009). In order to have successful collaborations, there must be common goals and objectives for each party involved and the collaboration must be mutually beneficial. Collaboration is based on the willingness of companies to share information related to planning, management, performance, etc. (Langley & Capgemini, 2009). Several factors affect and lead to a successful relationship, for example trust, commitment, openness, shared risks and rewards, communication, understood goals and objectives between the parties involved. Companies will achieve a successful level of collaboration if the above-mentioned characteristics are taken into account and implemented in the professional life of companies (Bajec & Zanne, 2009).