Third-Party Relations

Abstract

This paper has extensively explored the concept of the Third-party Relations (3PL). The main focus of the research was on the Pros and Cons of the Third-party Relations in reference to the cost and price and the benefits on the basis of the current global economy. However, the research has analyzed different aspects of the Third-party relations which it imposes on the operation and the assistance it provides in delivering and maintaining the compliance and the quality product to the customer, according to the manufacturer specifications.

Contents

Introduction2

Discussion3

Pros and Cons of 3PL Relationships3

Conclusion5

References7

Third Party Relationships

Introduction

Creating, maintaining and growing relationships are the most crucial and the complex part of any business and industry. Almost every company, in today's global economy conducts its business by using a combination of its employees and the third parties to help them in maintaining and delivering the service with quality and compliance. Therefore, the challenge which the buyers and sellers of the logistic industry face is not a surprise. Although, the power of e-commerce and modern technology is unavoidable, but the relationships and the values add compliance in the business operations and the productivity. A Third-party Logistics Relationship (3PL) provider is a firm that provides services to its customers of outsourced service providers for some or all of their supply chain functions. Third-party Logistics (3PL) specialize in the supply chain management functions like warehousing, transportation services and typically integrated processes. They excel their skills based on the market coalition and the changing demands (Sudalaimuthu, 2009).

In today's global economy, they are trained to offer services based on customization and customer specifications (Ranjan, et.al, 2004). This is because, now their services are not only restricted to the supply chain management but they also focused on value added services in relation to the procurement and the production. Nevertheless, third-party logistics providers typically manage a targeted function in the management like warehousing, transportation, or raw material providers. Third-party Logistics (3PL) emerged in the early 1990s, and their aim was to provide logistics service to an increasing number of customers for a variety of reasons. However, it faces a tremendous demand and entered into a longer business contracts with the logistics providers. According to the Council of Logistics Management, a firm which provides a variety of logistic services to the number of customers comes under the domain of 3PL. the core function of these firms is the relocation of the material from supplier to the manufacturers, and from the manufacturers to customers via the distributors and retailers (Ranjan, et.al, 2004). Typically, the Third-party relationship can be communicate as the use of outside distribution companies to perform the companies functions as per the requirement and the efficiency.

Discussion

Pros and Cons of 3PL Relationships

Although, 3PL is a highly effective and customer focused program which delivers the specification according to the customer's demand (Langley, 2005). However, like everything else, there are some pros and cons of the 3PL, which are going to be discussed in this assignment on the basis of cost, benefits ...