1、 The use of third party logistics services M.S. Sohail , A.S. Sohal With the globalisation of businesses and the consequent competitive pressures, there has been an increasing dependence on the ability of organisations to deliver customer-adapted products all over the world quickly and on time. This
2、 has placed a number of demands on the logistics system and has become a rapidly developing area of investigation. In fact, it has been referred to as the last frontier for the development of strategic competitive advantage (Hum, 2000). To gain a competitive advantage, many organisations are seeking
3、 to manage their logistics operations strategically, but realise that they lack the core competencies and are increasingly seeking to outsource their logistics activities (Hum,2000). Apart from this, another important development that is making an impact on the organisations is the increased emphasi
4、s on time-based competition (Bhatnagar et al., 1999). Broadly, time-based competition refers to the speed with which products can be manufactured, delivered to the market and serviced. Much has been written in recent years about outsourcing logistics activities. There have been various terms used to
5、 describe this phenomenon such as logistics alliance (Bowersox, 1990), operational alliances in logistics (Laarhoven and Graham, 1994), contract logistics (Kearney, 1995), contract distribution (Wilson and Fathers, 1989) and third party logistics (Lieb and Randall, 1996). However, third party logist
6、ics (3PL) has been the term more widely used in recent times. Given the growing importance of logistics outsourcing, the extent of its usage has been widely examined in the USA (Lieb and Randall, 1996). Sheffi (1990) describes how the 3PL industry in the US has developed, and mentions several econom
7、ic, regulatory and technological trends driving the development. Virum (1993) discusses 3PL development in Europe based on case studies of three Dutch and two Swedish providers. Other studies in the European context have also been undertaken (Lieb et al.,1993). An examination of the usage of 3PL ser
8、vices by large Australian firms (Dapiran et al.,1996) revealed that a number of operating units at many of the largest Australian firms were utilising the services of contract logistics providers. Some studies have outlined the linkage between manufacturing firms and 3PL services providers in Hong K
9、ong, Southern China, Japan and South Korea (Millen and Sohal, 1996). In the South East Asian region, it was reported that Singapore-based firms are generally satisfied with the services of 3PL service providers.With the advent of multi-modal logistics in Malaysia, service providers have been focusin
10、g on establishing linkages and forming an entire logistics chain. Another trend noticeable in the 3PL industry in Malaysia is that most of the players specialise in the field as freight forwarding, container haulage, warehouse operation or conventional truckers and operate with minimal linkage to th
11、e other components in the logistics chain (New Strait Times, 1998). The current crop of 39 players in the industry are limited in size and operating capacity with duplication of services offered being considered as too many in the industry. Companies have been merging into larger entities to take ad
12、vantage of the economies of scale and extend market coverage, as the value of a logistic company invariably lies in the market coverage of its network. However, to our knowledge, we have not found any comprehensive studies reported in the literature focusing on the extent of 3PL by firms in Malaysia
13、. This study aims to fill this gap. Results reported in this study indicate that a number of operating units at many of the Malaysian firms are utilising the services of contract logistics providers, and have been doing so for several years. Many of these organisations employ the services of more th
14、an one contract logistics firm to provide a wide variety of services. Furthermore, many non-users are interested in this approach as evidenced by the 30% who are exploring the idea.Those operating units utilising contract logistics services providers have substantial experience with this practice as
15、 evidenced by about 45% having done so for more than 5 years. The decision to utilise contract logistics firms is almost as likely to originate at the corporate, divisional or local level. However, wherever the idea originates, managers from other functional areas will usually be involved in the dec
16、ision to outsource. The level of commitment to the utilisation of contract logistics providers has been very encouraging with about 75% of the firms responding to this survey characterising their commitment as moderate to extensive. Additional evidence of this high level of commitment is provided by
17、 one-half of the firms allocating up to 40% of their total logistics budget to contract providers. In almost all cases,senior logistics executives view the use of contract firms as having had a positive impact on logistics costs, logistics systems performance, customer satisfaction, and employee mor
18、ale. Based on these results, more than 80% of the managers would at least moderately expand their companies use of contract logistics firms. To those logistics executives considering outsourcing,this very positive feedback should be reassuring. The number of experienced organisations provides an imp
19、ortant source of information about how to proceed and what to expect. Consideration of the use of contract logistics services providers will bring logistics managers in contact with colleagues in finance, marketing, manufacturing, and other areas, potentially expanding the logistics influence throughout the organisation. This should improve the scope of the analysis, as well as subsequently facilitating implementation.
