Abstract – Supply chain management has played a
significant role in global market. The role of logistics in supply chain
management is to provide plenty of significant improvements in industrial
development. However, Third-party logistics activities such as transportation,
warehousing, material handling and other value-added enable companies to get
customized logistical support while manufacturers focus on the core
organizational activities to achieve excellence. Third party logistics assists
to supply right product in right time with right quantity to right consumers.
The objective of this study is to statement the role of third party
logistics in supply chain management and to understand the relationship between
supply chain management and Third party logistics.
Many international companies have to
establish integrated supply chain network to support their international
business activities and enhance organizational competitiveness (Christopher,
2005). Logistics is one of the key functions for global business. one
the best way to lower their logistics cost is to contract their logistics
services to some third-party logistics service. Third-party logistics have
brought together materials, equipment and systems to handle many operational
such as high throughput, picking efficiency, rapid order processing, and
efficient use of space and efficient processing of value-added services.
Third-party logistics TPL often uses the customized activities as
entry into the distribution channel, warehouses and transportation systems for
manufacturers. Third party logistics have carved out a position in distribution
channel operations (Van Hoek 2000).
Prepared this paper, a study of the
logistics literature has been conducted together with several case studies.
Different aspects of collaboration between organizations in logistics setups
have been studied where the services and the activities have been analyzed to
understand the Third Party Logistics and Supply Chain Management
3.What is Third party logistics.
Global supply chains are at the heart of business strategy,
and often the difference between profit and loss in industries that operate
with slim margins even during expanding economic conditions. But they are also
fraught with risks, which add complexity to supply chains. Supply chain disruptions
can move a company from leader to laggard in short order: risks that include volatile
energy costs, product quality issues, and even natural disasters. Successful
companies develop risk mitigation strategies and use resilience as a
competitive advantage. Third-party logistics help companies develop and
implement these strategies although the industry is increasingly vital to the
domestic and world economies, there is no single, legal definition of TPL,
sometimes called logistics outsourcing. Generally speaking, though, TPL is the
business of managing various elements of the supply chain via contract or
outsourcing. TPL provider manages all or part of a client’s logistical
requirements, which may include transportation, inventory optimization,
warehousing, order fulfillment, or the integration of these and other functions.