The business world offers numerous examples of companies sourcing their activities out. This
literature review will put emphasis on companies that engage with a third-party that provide
logistics services to them. Third-party logistics (TPL), which can be perceived as outsourcing
logistics, has been receiving considerable amount of attention within the academic world (e.g. Lieb
and Bentz, 2004, 2005; Lieb and Randall, 1999; Cooper and Johnstone, 1990; Fernie, 1989;
Marasco, 2007). This trend has been dominating both the business world and the academic world
since the 1980s (Stalk, Evans and Shulman, 1992; McKinnon, 1999) and yet, this topic doesn’t
seems to be exhausted. While Porter (1985) illustrate the Value Chain, he argues that
organisations need to assess their activities in their value chain and evaluate whether they create a
competitive advantage by executing this activity in-house. If they do not achieve so, he continues
by suggesting outsourcing that activity. Hsiao et al. (2009) distinguish between core business
outsourcing and non-core business outsourcing. A firm’s core business or core competencies can
be designated as “the collective learning in the organization, especially how to coordinate diverse
production skill and integrate multiple streams of technologies” (Prahalad and Hamel, 1990).
Core business outsourcing can be understand as activities such as product design, development,
manufacturing, marketing, and sales (Facanha and Horvath, 2005), and research has proven that
this business conduct may have positive effects in order to be responsiveness to inconsistencies in
demand (Dabhilkar and Bengtsson, 2008; Jiang et al, 2007). The non-core business in
manufacturing industry incorporates activities such as IT, HRM, accounting and logistic services
(Hsiao et al, 2009). However, this literature review will not focus on outsourcing core business but
will concentrate on outsourcing non-core business; in particular outsourcing of logistics activities to
TPL. Initially, this paper will draw attention to essential definitions that have been published over
the years. This will be followed by an examination to discover the driving forces for this field. The
main body will be closing with the highlighting the risk that are associate with outsourcing.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- DETERMINE KEY TERMINOLOGY
- DRIVERS OF OUTSOURCING
- WHY OUTSOURCE?
- WHAT LOGISTICS FUNCTIONS SHOULD BE OUTSOURCED?
- HOW TO MANAGE SATISFACTION WITHIN A 3PL PARTNERSHIP?
- MANAGING RISKS AND PROBLEMS WITHIN AN OUTSOURCING-RELATIONSHIP
- DISCUSSION AND CONCLUSION
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This literature review explores the phenomenon of third-party logistics (TPL), focusing on the reasons why companies outsource logistics activities and the associated risks and challenges.
- Defining and clarifying key terminology in the context of TPL and outsourcing
- Examining the main drivers of outsourcing logistics activities, such as cost reduction, service improvement, and increased flexibility
- Identifying the specific logistics functions most commonly outsourced and analyzing the prevalence of outsourcing in various sectors
- Analyzing the risks and challenges associated with outsourcing logistics, highlighting potential pitfalls and strategies for managing these issues
- Exploring the implications of outsourcing logistics on business strategy and supply chain management
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter 1: Introduction This chapter introduces the topic of outsourcing logistics and provides a general overview of the research area. It highlights the increasing prominence of third-party logistics (TPL) in both the business and academic worlds. The chapter also introduces key concepts such as value chain analysis and core competencies, emphasizing the importance of strategically deciding which activities to outsource.
Chapter 2: Determine Key Terminology This chapter focuses on defining key terms related to TPL, emphasizing the various perspectives and interpretations offered by different scholars. It explores the concept of outsourcing and its relationship to contract logistics and third-party logistics. The chapter provides a comprehensive overview of the diverse definitions used in the literature and aims to establish a clear understanding of the subject matter.
Chapter 3: Drivers of Outsourcing Chapter 3 examines the driving forces behind the increasing adoption of TPL. It highlights the major reasons for outsourcing, such as cost reduction, service improvement, flexibility, and focusing on core competencies. The chapter also discusses the influence of factors like globalization, deregulation, technology advancements, and the rise of just-in-time production systems. It further explores a framework for analyzing outsourcing decisions, encompassing "why outsource," "what functions to outsource," and "how to manage satisfaction within a 3PL partnership."
Chapter 3.1: Why Outsource? This section dives into the specific reasons why companies choose to outsource logistics activities. It presents a range of motivations, including cost reduction, service improvement, increased flexibility, and a focus on core competencies. The chapter also discusses the role of globalization, deregulation, technology, and just-in-time production in influencing outsourcing decisions.
Chapter 3.2: What Logistics Functions Should Be Outsourced? This section explores the different types of logistics functions that are commonly outsourced. It examines the prevalence of outsourcing specific activities such as transportation, warehousing, inventory management, and information systems. The chapter also analyzes the varying degrees to which different logistics functions are outsourced across industries and provides insights into the suitability of various functions for externalization.
Chapter 3.3: How to Manage Satisfaction Within a 3PL Partnership? This section examines the importance of managing satisfaction within a third-party logistics partnership. It discusses strategies for ensuring effective communication, collaboration, and performance monitoring in order to maintain successful long-term relationships.
Schlüsselwörter (Keywords)
This review focuses on the key themes and concepts surrounding outsourcing logistics, specifically third-party logistics (TPL). Key terms include outsourcing, contract logistics, value chain, core competencies, cost reduction, service improvement, flexibility, information systems, warehousing, transportation, risk management, partnership management, and supply chain management.
- Quote paper
- Sebastian Kress (Author), 2012, Literature search and literature review - Outsourcing logistics activities , Munich, GRIN Verlag, https://www.grin.com/document/192534
