Moving toward a Global Supply Chain Operations and the Impact on International Competition

As the domestic businesses expand, many are making the choice to use foreign products, labor, and services to aid in their production. Global supply chains are minimizing the costs of the production process but are also creating vulnerabilities to home countries. As the global economy changes, the competitiveness between countries grows. Competitiveness can affect everything from a country’s economy to how a firm conducts international business. Addressing the need to find a method to increase the United States competitiveness in the world economy by improving the use of global supply chains would help to make domestic firms more successful in the global economy. Studying how companies position themselves abroad is important to providing insight into how to become more competitive. Worldwide companies are diversifying by moving more of their supply chain to international locations. This is providing them with many benefits such as better markets for products, lower costs, and more advanced technologies. As a result, the competitive strategy of companies is to increase production and decrease costs through the most efficient global supply chain. Maximizing the potential of domestic firms’ global supply chains is one of the most effective ways to increase U.S. competitiveness. If more big businesses in the United States are willing to participate on the global level, then the US will be able to improve their competitiveness.

Overview on 3PL Selection Problem

Many companies outsource their logistics functions to Third-Party Logistics providers (3PL) instead of achieving them internally. The studies on this field are mostly of empirical type and focused on reasons, benefits, and risks of working with 3PL as well as the role of those on supply chain management. This chapter focuses on 3PL selection problem and presents a literature analysis of 47 articles published within 2001-2011 period. The objective is to identify the mainly approaches applied and their evaluating criteria in measuring the performance of 3PL.

Does the Outsourcing of Logistics Services Keep its Promise of Increased Efficiency?

The aim of this chapter is to evaluate the efficiency of third party logistics (3PL) and the importance of outsourcing logistics services from the client’s perspective. The research focuses on current practices related to the extent of use, predictive value outsourcing and performance measures system of Colgate-Palmolive Company in Greece. The study examines the efficiency of the logistics service providers, and its impact on the overall client performance, evaluated through interviews with the 3PL Coordinator, the Logistics Manager, and the Manufacturing Director. The key findings of the work are that logistics outsourcing takes responsibility for non-core business functions, brings reductions of stocks and costs as well as order-to-delivery lead-time, accelerates capital turnover and capitalizes on synergies to achieve efficiency. Overall, its contribution is evaluated by the client as satisfactory and of medium significance, with room for improvements.

A Framework for the Management of Logistics Outsourcing Life Cycle

During the last decade, logistics outsourcing relationships have been thoroughly researched. Much of the prior work on the management of outsourcing has focused on the benefits, challenges, and risks. In this study the focus is on the management of logistics outsourcing life cycle. After synthesizing a number of models, this study proposes a framework for the management of logistics outsourcing life cycle. It proposes a systematic procedure that consists of specific steps and sub-steps. The proposed steps are the following: feasibility study, requirement analysis, market research, selection, planning of partnership, development and operation of partnership, partnership management, and re-identification of partnership. For every step, the activities, aims, and deliverables are defined, presented, and analyzed.

Managing the Risks of Outsourcing IT Security in Supply Chain

Enterprises are expeditiously outsourcing the non-core business processes and functions. This is happening in order for new efficiencies to be found and costs to be reduced along with the increase of shareholder value. Enterprises in a supply chain use networks to share information assets. Information Systems and Information Technology are essential for their business operations. Organizations resort to outsourcing, in order to balance the infinite requirements with organisational assets. Supply chains that are relying upon sourced Information Systems (or/and IT) are vulnerable from Information Security (IS) specific types of risks to supply chains. These systems and their components are at increasing risk of supply chain. The process of securing all elements of IT systems (whether it is hardware, software, or services) throughout their life cycle is critical. The scope of the chapter is to identify the basic process of outsourcing Information Security functions/processes in Supply Chain and moreover to adduce the practice of it.

Key Contractual Issues with Logistics Outsourcing

Whilst there have been many papers on logistics outsourcing there is very limited commentary on the contractual issues with logistics outsourcing. Most of the literature can be generally categorized according to different focus area. Some of these focus areas include logistics practices, usage of 3PL logistics services, current state and future trends, strategies, and performance measurements. The chapter attempts to address this “gap.” The chapter will focus on some of the key contractual issues with logistics outsourcing contracts currently troubling customers, service providers, and advisers, such as (a) scope of the services; (b) change control; (c) service levels and service credits; (d) risk allocation – limitations and exclusions of liability; and (e) benchmarking.

Using Outsourced Logistics Services (4pl)

The objective of this chapter is the study of the economical and legal environment in which logistics enterprises operate in Greece. Firstly, there is a presentation of logistics outsourcing and the existing 3PL and 4PL organizational models as well as an analysis of the economical and legal system which influences the operation of logistics ventures in Greece and a presentation of the funding possibilities according to Greek law. An economical sustainability study is being conducted according to the Net Present Value method (NPV), and two types of ventures are studied: an asset based venture, and a non asset based venture. At the end of this chapter, there is a sensitivity analysis with respect to the discount rate that is used in the NPV (Net Present Value) method. The results of this analysis showed that a change of the discount rate has significant consequences on the economics of the project.

Measuring Performance of Logistics Outsourcing Services

As the business competition is becoming more intense, there has been a great pressure to the logistics service providers to demonstrate its contribution to the organizational performance. Consequently, there has been a tendency of studies focusing at measuring the logistics service performance within various perspectives. This chapter provides a review on several significant studies that measures the performance of logistics services followed by presenting an empirical study on measuring logistics performance as perceived by the customers in the UK context. The empirical results confirms the relationships and consequent effects of LSQ-satisfaction, relationship quality, and customer loyalty-by providing a process model that shows the process of how customers would stay loyal in the logistics outsourcing business relationships by using exit intention as the output variable. The model in this study can greatly assist the logistics outsourcing companies in measuring the performance of their services. It helps the logistics companies understand how their customers measure the quality of their relationship experiences in receiving the logistics services provided by the logistics companies.

Short-Term Time Series Prediction for a Logistics Outsourcing Company

In this chapter, tools from univariate time series analysis and forecasting are presented and applied. Time series components, such as trend and seasonality are introduced and discussed, while time series methods are analyzed based on the type of the time series components. In the literature, linear methods are the most commonly used. However, real time series data often include nonlinear components, so linear time series forecasting may not be the optimal choice. Therefore, also a basic nonlinear forecasting method is presented. The necessity of these methods to logistics service providers and 3PL companies is presented by case studies that present how the operational and management costs can be cut down in order to ensure a service level. Short term forecasts are useful in all the units of activation of 3PL companies, i.e. supplies, production, distribution, storage, transportation, and service of customers.

Outsourcing Execution in Transportation and Distribution

Outsourcing can be a very effective strategy to increase operational performance and improve customer service; at the same time, that minimizes capital investment, freeing up capital to other important projects according to the company strategy that will increase revenue and profitability. However, when outsourcing is not performed in the right way, as there are several examples in the marketplace, it can also decrease performance and hurt customer service, reducing company competitiveness. Therefore, it is critical to establish a robust Outsourcing Execution Process to reduce risks of vendor failure due to lack of operational capability, performance management, and conflict of culture between 3PL and the company, just to enumerate a few possible real life problems. This chapter provides a broad and updated introduction of transportation and distribution operation, and based on literature review and practical experience from the authors, several best practices are reviewed to support outsourcing execution in transportation and distribution operation.