Third Party Logistics: Benefits and Issues

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Third Party Logistics (3PL): Benefits and Issues


Third-Party Logistics have continued to play a strategic role in the management of supply chains most especially in the developed world over the past years and has seen a consistent increase in its usage in the world. In Malawi the concept is still new and has also been adopted by the public sector. There are clearly benefits associated with the use of the approach which enables companies to concentrate on their core competencies. However, there are critical issues to be addressed in order to experience the benefits. This
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However, the predominant direction is that there is increased use of outsourced logistics services. In Malawi on the other hand, outsourcing is a new concept and its use is at its infancy with most known arrangements occurring in the public sector. For example, most public institutions like schools, hospitals and government offices have outsourced cleaning services, provision of meals to students and patients, landscaping and gardening to third party arrangements in order to concentrate on core competencies. Security is another aspect that has been outsourced. The area of third-party logistics has also not been spared in the public service with some health commodities being distributed through a third-party arrangement. While the third-party arrangements have been growing especially in the logistics area, there is very little almost non-existent literature on the status of the 3PL industry in Malawi.
The objective of this paper is to present some benefits and issues in 3PL in general and has been organized as follows; in the following section, a brief background to why third-party logistics services have been adopted including a review of the relevant literature. Subsequently, the benefits that have been associated with use of 3PLs are presented followed by a presentation of the critical issues and requirements necessary in establishing beneficial 3PL relationships. Both sections will be related to the Malawi experience of a 3PL
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