The Use of Third-Party Logistics Services by Large American Manufacturers

UPS uses many different approaches to shipping goods and information. The company owns and operates a fleet of vehicles and it also has a fleet of airplanes as well. However, a main component of how the company differentiates itself from its competitors is how it has Supply Chain Management offerings. This is an area where the company has a competitive advantage against other companies in the industry. The company also has advantages in terms of how it uses technology to become efficient. This is highlighted by the handheld computers that many

In this project, we will be studying Canadian Tire Auto Services’ main supply chain strategies. Canadian Tire provides many automotive services for their clients with many locations across the countries. Our goal for this project will also be to look into Canadian Tire’s logistics operations, their process of supplier selection, and evaluation. We will also look to study their use of the latest IS/IT innovations. We will then conclude our project by realizing the importance of supply chain management integration, as well as, the challenges and practices within a global supply chain.

Package delivery is the core of UPS’s operation, and the firm has mastered a simple service of safe, on-time delivery. UPS possesses a strong domestic presence and is increasing its international market position by delivering 18.3 million pieces of parcel daily, and services every physical address in North America and Europe (UPS Fact Sheet, n.d.). The firm owns one of the largest airline fleets and operates global airport hubs located in Kentucky, Florida, Germany, China, Canada, and Latin America. It is evident, UPS replicates one simple service several million times a day, which is delivering packages. UPS Supply Chain Solutions include a synchronized approach to exceed consumer expectations. Its services include transportation, consulting options, contract logistics, and various other services sure to meet any consumer or industry needs. The firm’s experience in high-tech automation and expertise in freight handling provides accessibility to every industry that requires product relocation. People rely on UPS for quick deliveries and integrated solutions that enhance supply chain opportunities.

The logistics in this context is not a minor aspect; HP needs to rely on a logistics supplier that will be able to provide a varied range of transportation alternatives that can be adapted to HP 's requirements, to provide complete visibility through high performance information systems and to deal with changing international complexities. HP found in UPS the desired capabilities to act as a partner supplier and since then they have developed a relationship based on trust and collaboration, high performance and cooperation. UPS handles all of HP 's logistic needs from transportation to warehousing and documentation requirements; for the variety of products the company handles from small consumer devices to large installations; and all across the world from a small local package delivery to warehousing assistance in Shanghai.

LeSaint Logistics is a third party logistics of PPG Inc. This organization is mostly an automotive paint distribution warehousing company, though they do store and ship for other companies like 3M. LeSaint Logistics employs roughly 1000 people directly. Some locations have PPG employees working alongside LeSaint employees. There are different levels of management and supervision throughout the organization. Typically at the warehouse level there are three supervisors; one in receiving, one in shipping, and another in customer service. They report directly to the warehouse distribution center (DC) manager, who manages the entire warehouse. The DC then reports to the regional distribution center manager, who then reports to the Vice-President

Similarly, Verizon company uses 3PL provider, New Breed to develop an automated warehouse fulfillment solution that provides same-day processing of its direcct-to consumer orders (Patridge, 2008). The 3PL operates of Verizon’s three distribution centers, offering real-time visibility to orders and inventory by tracking every serialized unit. Moreover, New Breed ships 20,500 consumer orders daily for Verizon with 99.9 percent accuracy while 100 percent of orders that arrive before 5 p.m are shipped the same day (Patridge, 2008). A customer even states, a call made to Verizon on Monday afternoon regarding a replacement of battery was quickly sent by tuesday morning (Patridge, 2008). This clearly indicates the fast and effectiveness of 3PLs into a company’s operations.

Soon afterwards, UPS disbursed packages nationwide and began to increase their international services (Rodrigue, n.d.).

Ford Motor Company, one of the world’s largest automotive manufacturers, has worked with Penske on several Six Sigma initiatives. As its lead logistics provider (LLP), Penske’s quality team of associates are trained in Six Sigma practices and work closely with Ford to streamline operations and create and maintain a more centralized logistics network. Together, they uncovered several areas for real cost savings as a result of reducing inbound carrier discrepancies, eliminating unnecessary premium costs and reducing shipment overages. Plus, Penske implemented accountability procedures and advanced logistics management technologies to gain more visibility of its overall supply network.

Third party logistics is a provider that gives companies the ability to outsource their logistics services. Logistics services that may include anything throughout an organization that involves management of the way resources are moved to areas where they are required or needed. Some would say the term, third party logistics, come from the military. In the business world, third party logistics con somewhat have a broader meaning. Meaning that it can be associated with service contracts that involve shipping or storing of items. Third party logistics provide services that may be a single service such as warehouse storage or transportation related, but it can also provide a system-wide bundle of services that have the capability of managing a company’s entire supply chain. Photo provided by Robinson (2013).

Logistics is one of the last processes of the company who can improve corporate efficiency by the outsourcing. It also reduces the distribution cost where manufacturing firm has many products and they do have also its outlets globally. 3PL has grabbed the opportunity for the shipper in all expects, they are low cost then shipper, innovative machine, skilled labor and fast moving ability. 3PL is improving its technology and also give technical knowhow to its technicians for establishing better alliances. The research directly targets the main stream of the

A Third-Party Logistics Provider (3PL or sometimes TPL) is a company that provides an outsourced (or "Third Party") logistics services for part, or all of their supply chain management functions.to its customers. Third-Party Logistics Providers (3PL) specialize in providing an integrated operation including warehousing, storage, and transportation and distribution services. The advantage of the 3PL service provider is that their service can be scaled and customised to their customers' needs based on market conditions, growth of the business, extended to other cities and countries. The services they offer go beyond logistics and include value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. When

ICS is one of the most widely recognized third party logistics companies in its industry. We are seamless to the end customer as we represent the manufactures. We provide emerging manufactures the necessary infrastructure and knowledge necessary to get their product into the market. With 20 plus years of experience in the market and providing world class service consultants and manufacturers rely on these qualities of ICS. The support of our parent company AmerisourceBergen has allowed ICS to make significant investments in infrastructure and human capital. Infrastructure investments such as warehouses and equipment has been instrumental in the optimization of inventory

Despite the third- party logistics was an improvement studies area in a recent business market, the studies of this area still existed some arguments and limitation (Marasco, 2008). The literature review in TPL studies based on a comprehensive literature review, which including some relevant research paper and journal paper published within the period 1990 to recent years (Selviaridis and spring, 2007). Some existing studies focus on the benefits and limitation of TPL services for company management. Leahy (1995) and other scholars were defined as the TPL is usually associated with the providing of multiple services rather than just isolation transport functions (Leahy et al., 1995). Therefore, some other research believes that the TPL services can reduce the total

In recent years, Third Party Logistics (3PL) service providers play a very important role in a supply chain of an organization. A brief literature review is given in this section of the paper. Tate (1996) identified seven factors (compatibility, deep understanding of a partner's business needs, open communications, commitment, fairness, flexibility, and trust) that improved long- term relationship between 3PL and their customers. Logan (2000) used agency theory to help in bonding 3PL/customers relationships. It is postulated that, cost reduction and services improvement criteria are most expected by clients to avoid conflicts with their 3PL. Fawcett and Smith (1995) identified five criteria’s to evaluate the 3PL performance,

Over the last few decades, the role of logistics in business has increased in scope as well as in strategic importance (Caplice and sheffi, 1995). In general, distribution logistics is expected to ‘provide the right goods at the right time, at the right place, in the right amount and quality, and at the right price’ (Jünemann & Daum 1989, p. 18.)