3PL
From Supply Chain Management Encyclopedia
Russian: Логистические провайдеры
Third-party logistics (3PL) is a model of outsourced logistics and related processes. A 3PL provider is an organization that delivers integrated logistics services for the customer: transportation, warehousing, handling, securing, customs clearance, etc. 3PLs typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials.
Advantages:
- Focus on core strength
- Provides technological flexibility
- Provides other flexibilities
Disadvantages:
- Loss of control
According to (Hertz and Alfredsson, 2003),[1] the following 4 categories of 3PL organizations are distinguished:
- Standard 3PL provider: this is the most basic form of a 3PL provider. It would perform activities such as, pick and pack, warehousing, and distribution (business) – the most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity.
- Service developer: this type of 3PL provider will offer their customers advanced value-added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks.
- The customer adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the company's logistics activities. The 3PL provider improves the logistics dramatically, but do not develop a new service. The customer base for this type of 3PL provider is typically quite small.
- The customer developer: this is the highest level that a 3PL provider can attain with respect to its processes and activities. This occurs when a 3PL provider integrates itself with the customer and takes over the latter's entire logistics function. These providers will have few customers, but will perform extensive and detailed tasks for them.
References
- ↑ Hertz S. and Alfredsson M. (2003) Strategic development of third party logistics providers. Industrial Marketing Management 32: pp. 139–149
