Stakeholder Advantages of a 3pl

Outsourced almost 87% of production activities involving spare parts while maintaining core competencies like R&D, design, quality control and key trademark

The transportation and logistics company is a fast growing industry, and it is very competitive. Many companies invest heavily in the transport and logistics company to ensure the flow of goods from the producer to the consumer market. A good flow of products to the consumers provides growth in a country. The logistics companies deal with the planning and coordination of the transportation and delivery of the goods. In 2015, the U.S earned $1.48 trillion, which was approximately 8% of the annual gross domestic product (GDP) (U.S Logistics Industry-Statistics and Facts, 2017). Many firms, both multinational and local, have tried to find solutions to the underlying problems in the transportation and Logistics industry to ensure good movement of goods from producer to consumer market.

25. What are the merits of outsourcing the performance of certain value chain activities as opposed to performing them in-house? Under what circumstances does outsourcing make good strategic sense?

As customers continually demand their shipments delivery to be cheaper and faster, all the logistics service corporations should focus on improving their services and customer responsiveness. The rivalry of existing competition is intense and low buyer switching cost only triggers it.

Outsourcing: Outsourcing the inventory function to Global Logistics who would be responsible for warehousing, inventory management, and order fulfilment (including picking, packing and shipping). This would enable the company employees to focus more on sales and expansion of the company while ensuring that the inventory management is in able hands.

Due to the large quantity of freight and the long distance that it must travel to arrive to its destination exporters and importers alike have found logistic service providers essential to engage in international trade (Rodriguez, Comtois, Slack, 2013). While some Logistics service providers focus only on the area of transportation others specialize in freight consolidation, distribution management, and warehousing (Robinson, 2014). They have enough market knowledge, information and communication systems to offer supply chain solutions tailored to the specific needs of any company be it small or large (Rodriguez, Comtois, Slack,

The key external stakeholders involve a group of person who has an interest in the activities and affairs of a company (Rockart, & Short, 1989, p 8). Surely, internal stakeholders craft the value from all departments of the organization. In addition, the notion of quality as Evans supports it helps us identify other stakeholders within the value chain like the suppliers and the distributors (2014, p 9). In other word, the supply chain stands for the sequence of activities that supplies products or services to the organization. Besides, the sphere of influence is the range of political, contractual, economic or other relationships through which an organization has the ability to affect the decisions or activities of individuals or organizations (Rockart, & Short, 1989, pp 9-10).

Over time, new healthcare reform measures were causing fundamental changes in reimbursement for services to hospitals and IDNs. Consequently, healthcare providers had to establish financial stability. This opened the door for third-party logistics providers (3PLs) to establish a strong presence in the healthcare industry. 3PLs? offered solutions to mitigate transportation and supply chain expenses that streamlined the order-to-delivery process and reduced expenses.

In the world of business management, a stakeholder-based approach to management suggests that managers need to formulate and implement many processes to satisfy the numerous stakeholders groups who are invested in the firm. The main goals in the approach are to manage and to unify the relationships and concerns of the various shareholders, customers, suppliers, employees, employers, and the other groups in such a way to successfully ensure the existence of the business in the long-term.

Westminster Company is one of the largest manufacturers of consumer health products, based in US. Their distinctive name and company logo are recognized throughout the world. Westminster was originally founded as a family-owned pharmaceutical supply business in 1923, the company has expanded, by virtue of aggressive new product development, into a global provider of health care consumer products. It consumes three wholly owned subsidiaries, manufacturing grocery product, drugs, and mass merchandise. Intense rivalry in the market, and distresses of having an effective supply chain, made the company evaluate its supply chain and logistics. The primary focus of its research was the key clients of the three companies. To understand logistics the company must first know what logistics is and how it works. Logistics is defined as a business planning framework for the management of material, service, information and capital flows (Logistics World , 2014). Logistics is an important function of the business and without a proper logistics system, all the manufacturing, marketing and other activities would fail, overall resulting with the company failing to reach its full potential. After thoroughly analyzing the case study of, Westminster Company, to improve their current logistic strategy, they would need to implement the following strategies: developing and analyzing a new system to focus on strategic effort to ship their products in a timelier, efficient and in a more accurate

Industries have in the earlier years concentrated on enhancing the supply chain activities in search of creating value. Nonetheless, optimizing these activities, only can lead to operative proficiency and not structural effectiveness. Contritely, when an organization, focus on growing their business through the value chain the organization has the opportunity to accomplish operative effectiveness and do not have to negotiate their operative competence. The value chain is designed to not only eliminate activities that do not

As discussed above, to reduce costs it would be reasonably advisable having closer partnerships with third-party logistics so as to understand each other’s needs and devise the best logistics

The selected business functions that outsource to a third party has become a common practice in the corporate world. The function of logistics is often to outsourced and providing logistics service companies have evolved into providing a vast range of logistics functions including inventory management, transportation services and warehousing services. The companies which provides logistics services on contract to other companies are known as Third Party Logistics Providers ( 3PLs).

It is known to us, “in each industry, the customer is god, is operator's food and clothing parents.” This tells us that customers are important to organizations. With the current intense competition in logistics nowadays, most companies can provide high quality goods, even are willing to cut down prices if reasonable. However, how can suppliers gain a competitive advantage when high quality is expected and price must be maintained at a level to generate a reasonable return? In our views, it is no doubt that how various supplier service activities are valued by customers, more specifically, that is, the ability of logistics

Indeed use of third-party logistics (3PL) firms in transportation helps firms to meet complexities of global trade, worldwide increased competition, as well as the constant downward pressure in terms of prices and margins. This is in a bid to build up better logistic systems that can fulfill their needs for better services at a lower cost. Among the reasons as to why companies use 3PL firms is to outsource non-strategic activities which enables organizations to concentrate on the major competencies as well as to exploit external logistics expertise, (Ivan Su Hertz, Susanne, 2009). These third party firms have the capability of developing unique assets, acquiring the necessary resources and achieving superior logistics performance using 3PL relations. Companies therefore find it efficient and effective method of achieving the needed service with no engaging so much in investing new capabilities and in assets upon entering into a relationship with 3PL firms.