Growing Pains for Logistics Outsourcers
- Topics:
- Logistics Planning
- Tags:
- 3PL,
- Better Management.com,
- Business Operations,
- Enterprise Software,
- Logistics,
- Logistics Provider,
- Software,
- Supply Chain,
- Supply Chain Management (SCM)
- Source:
- Better Management.com
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Overview: Third-party logistics providers (3PLs) have built a $100 billion industry that plays an increasingly important role in the world economy. Determined to save money and to focus on core businesses, companies in the automotive, electronics, chemical, and fast-moving consumer goods sectors, among others, are outsourcing more and more of their warehousing, distribution, and other supply chain activities to these 3PLs. More recently, the logistics companies, focusing on improving their customers’ supply chains, have promised a 10 to 25 percent reduction in their customers’ delivery cycle times by eliminating certain goods-storage steps and improving their information-management skills. Such efficiencies can boost sales because they help producers to respond more quickly to market trends and to reduce stock-out costs. This paper suggests that logistics providers eager to establish more equitable customer relationships and to shore up their long-term business models might consider a strategy built on three related approaches: Offering more value, creating structural scale advantages, and pursuing consolidation.
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Format: HTML | Date: Jan 2003 | Pages: 4
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