Logistics Management : Third Party Logistics

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Third-Party Logistics (3PL) is a logistics program that has been outsourced to a company that specializes in logistics management. These 3PL organizations hire experienced logisticians, supply chain managers, statisticians, and other specialized professionals to handle some or all aspects of a business’ logistics program. Organizations are opting to outsource their logistics management for a variety of reasons; “Some companies choose to let third-party providers handle only transportation or warehousing; others opt to outsource everything from packaging and assembly to inbound transportation and freight consolidation” (Feeley & Driscoll Certified Public Accountants). The following paper addresses some of the reasons why companies around the world are outsourcing their logistics management instead of keeping it in-house. To understand why companies are outsourcing their logistics operations, we must first define and understand what logistics and logistics management actually is, and what it actually does for a business. Logistics management, according to the course text, is “An approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities” (Heizer & Render, 2014, p. 444). It is part of the supply chain management system that addresses the shipping, receiving, and storage of goods and services. The goal of efficient logistics management is to “…obtain efficiency of operations through the integration
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