Third-party logistic providers

What are some of the benefits of using a third-party logistics provider ... 

Third-party logistics providers. Using logistics specialists to fulfill basic supply chain functions will enable companies to focus on core competencies. 

The projection of warehouse items five to ten years into the future, considering direct-store-delivery (DSD), and store-direct items from other wholesalers (such as Certified Grocers and frozen food third-party logistics providers)... 

This case describes the role of consolidation centers in the lean supply chain. The description here articulates the rules for designing a consolidation center, a supply chain middle man that makes the total chain more effective. Consolidation centers are playing an increased role in many supply chains, particularly as feeders to manufacturing operations that produce complex products with many components. Every supplier cannot or will not link its operations with its customers. The consolidation center enables this linkage — at least until better suppliers can be found. In some cases, consolidation centers are under the control of third-party logistics providers responsible for ordering material, its transportation, and its preparation for the manufacturing center. 

Breadman A term applied to automatic replacement of inventory by third-party logistics providers, normally distributors. The analogy is the breadman who replenishes stock in the grocery store on a regularly scheduled basis. A related term is milk run. The term can also apply to types of vendor-managed inventory. 

Third party logistics provider A company specializing in performing logistics-related services for its customers. Examples include warehouse, transportation, and product assembly. Also called 3PL. ... 

The distribution tier receives customer requirements and is responsible for delivering required products or services. It involves such general units as warehouses, distribution centers, and cross-docking points. These units are grouped into distribution sub-tiers. Alternatively, supply chain units in the distribution tier can be classified as wholesalers, retailers, and brokers. Third-party logistics providers present a special case for belonging to the distribution tier. In some situations, these can be represented by a single supply chain node. 

Foggin et al. (2004) A supply chain diagnostic tool to determine problems, inefficiencies, or needed improvements in a client s, or a potential client s supply chain that the third party logistics provider can effectively address. 

Bolumole, Y.A., 2001. The supply chain role of third-party logistics providers. International Journal of Logistics Management 12, 87-102. 

Hertz, S. and M. Affedsson, 2003. Strategic development of the third party logistics providers. Industrial marketing management 32,139-179. 

Another prominent example is partnering between manufacturers and third-party logistics providers, or 3PLs. The third-party providers leverage their expertise and infrastructure to fill what have been internal roles in material management. An example is the consolidation center described in a case study in a later chapter. Forging supply chain partnerships, we believe, is indispensable in improving supply chain operations and competitive position. 

Hertz, S., Alfredsson, M. (2003). Strategic developmtait of third party logistics providers. 

Many organisations respond by a maximum variable, minimum fixed policy. This is helped by outsourcing all but the core capabilities, which are retained in-house. Thus transport and warehousing are today often outsourced to specialist third-party logistics providers such as DHL Exel and UPS. 

A third-party logistics provider has offered to combine shipments for each of the two companies on a single truck. This will increase the cost of each truck to 600. If the two companies agree to the joint shipment, what is the optimal order frequency and size What is the annual ordering and holding cost for the two companies combined Should Ford and GM accept the third party s proposal How should they divide the fixed cost pa- truck among themselves ... 

---