The Third Party Logistics

Introduction3

How Best Buy Manage Logistics3

Best Buy and Third Party Logistics4

Brief History of 3PL4

Layers into Logistics Service6

Advantages of 3PL7

Conclusion7

References8

Table : 19

The Third Party Logistics

Introduction

Best Buy is one stop solution for all types of electronic goods. In 1966, the company had started by the Richard Schulze under the banner “Sound of Music”. In 1983, the company changed its name as Best Buy. The major consumer base of Best Buy is located in the United States of America (USA), but some of its stores are also located in China, Canada and Mexico. Each year around 1 billion people are visiting its website, and 600 million people are visiting the Best Buy stores in the U.S. The company not only offers consumer electronic products, but also providing repair services. The electronics items include the video games, toys, health fitness, sport items, computers, tablets, mobile phones, musical instruments, and home appliances. All these items are always in great demand. The company gets thousands of orders on a daily basis. It is somewhat because of the surge in E-commerce. Definitely, the delivery of these items at different locations requires a sound system. The Best Buy solved this through the Third Party Logistics (3PL).

How Best Buy Manage Logistics

It is not an easy task to manage such a huge flow of delivery on a daily basis. For this, company had outsourced the logistics for an effective system of delivery. In this world of technology, outsourcing is not a novel. It is the techniques in which a company gives some part of the business to a vendor. The vendor then provides services to the company against some fixed amount. This technique reduces the burden of the company and gives an opportunity to focus on the core and productive parts of the business (Srabotic & Ruzzier 2012, pp. 205-225).

Best Buy and Third Party Logistics

The Best Buy has outsourced its logistic to many notable companies like the United States Postal Service (USPS), United Parcel Service (UPS) and 42 other preferred companies which are mentioned in the table 1. The people are given options to choose the company according to his/her own will. In the context of supply chain management, it is called the Third Party Logistic (3PL). According to this phrase, the company is providing logistics services to its customers through third party (Pathare 2008). Typically, the firm which provides this service is specialized and have sound infrastructure. A single 3PL firm can provide many services like the packaging, transportation, warehousing, inventory management and freight forwarding.

Brief History of 3PL

In the above diagram, there is the brief history of the 3PL. In the period 1900s-1950s, the majority of the firms were providing the single services. It means they had not invested too much amount in the business. After that the period of awareness had started. In this period, the demand of 3PL soared. Now 3PL providing firms separated the services. It means the specialization had occurred in this industry. The 3PL industry was growing at rapidly pace ...