Dissertations / Theses on the topic 'Third Party Logistics (3PL)'

In this thesis the Third-Party Logistics (3PL) partnership between the Japanese trading company Gadelius and the European logistics provider Mahé is investigated. This was done as a case study, mainly taking place on location at Gadelius’ headquarter in Tokyo.

The purpose has been to identify and evaluate the fulfilment of initial objectives, both with respect to agreed on terms and expectations of each party, analyze the reasons behind result and provide recommendations for the future.

In terms of what is strictly defined and agreed on in the contract the partnership is principally fulfilled, but this setup is not good in terms of how full 3PL-effects could be achieved.

The not so strictly defined parts of the contract stating that Mahé should work proactively are however not fulfilled to the same degree. This is connected to the lack of a dedicated Mahé representative being integrated into the OtD-team at Gadelius.

Because of this Gadelius’, to begin with very high, expectations on effects have become unrealistic, which has contributed to bad sentiments against Mahé and their capabilities. This has further been enhanced by Key Performance Indicators that don’t fully match the essential objectives with the partnership.

To change the situation two possible ways for the future are presented. If Gadelius’ focus is on indirect cost reductions an expanded partnership should be chosen, while a focus on direct cost reductions and a need for an easier change implementation call for a more limited partnership. For both alternatives new ways for measuring performance are suggested.

Syftet med detta examensarbete är att ur ett Supply Chain Management perspektiv undersöka förutsättningar för att implementera ett tredjepartslogistikföretag från EU i ett växande industriområde i Kina. Detta examensarbete fokuserar på distriktet Xiaohe i staden Guiyang i provinsen Guizhou.

Logistikbranschen är en av de snabbast växande industrierna i Kina. Den kinesiska regeringen föreslår en främjande policy för en logistikexpandering som innefattar skattereduceringar och nedsatta priser på lokalhyra och markpriser för logistikföretag. Den största skillnaden mellan marknaden i EU och marknaden i Kina är de kulturella skillnaderna i sättet att göra affärer och att umgås. Korruption kan förekomma i Kina och det är värt att undersöka de kinesiska företagen innan ett samarbete inleds. Om ett samarbete inleds kan det vara fördel att ta reda på om det finns särskilda bestämmelser i Kina. Detta för att minska risken att problem uppstår med de varor som ska exporteras och/eller importeras. En vara som ska importeras eller exporteras mellan EU och Kina ska förtullas genom inlämning av tulldeklaration till Tullverket.

När det gäller växande industriområden som i Guiyang finns det geografiska fördelar med avseende på handel genom att staden angränsar ett flertal andra provinser och att den anses som en knutpunkt i sydvästra Kina. Huvudindustrier förknippade med staden innefattar kol, järn, stål, aluminium, gödningsmedel och tillverkning. De lokala kinesiska logistikföretagen saknar den erfarenhet och kompetens som krävs för att kunna erbjuda logistiska helhetslösningar åt företagen i industriparken i Xiaohe i Guiyang. Vidare finns inga tredjepartslogistikföretag i staden. Delvis på grund av dessa anledningar är det en stor fördel för ett tredjepartslogistikföretag från den Europeiska Unionen att etablera verksamhet i Guiyang. Svagheten med en etablering är bland annat indikation på brister i infrastrukturen och långt avstånd till närmaste hamn. Vidare finns det en planering för utveckling i regionen som innefattar bland annat utveckling av transportinfrastrukturen.

The purpose of this examination thesis is from a Supply Chain Management perspective to examine the conditions for establishing a third party logistics company from the European Union in a growing industrial area in China. The thesis focuses on Xiaohe district in Guiyang.

Logistics industry is one of the fastest growing industries in China. The Chinese Government is proposing a promotion policy for a logistics expansion that includes tax reductions and reduced prices on rent and land prices for logistics companies. The main difference between the European Union market and the market in China is the cultural differences in the way of doing business and to socialize. Corruption may occur in China and it is worth to examine Chinese firms before cooperation can be settled. If collaboration is carried out, it may be advantageous to find out if there are specific rules in China to reduce the risk that problems occurs with the goods to be exported and/or to be imported. A product to be imported or exported between the European Union and China must clear customs.

When it comes to growing industrial areas as in Guiyang there are geographical advantages with thought of trading, that the city is adjacent to several other provinces and that it is regarded as a tie point in southwestern China. The main industry involved in the city includes coal, iron, steel, aluminum, fertilizers and manufacturing. Local Chinese logistics companies have lack of the experience and skills that is needed for providing logistics solutions to companies in the industrial park in Xiaohe District in Guiyang. Furthermore, there are no third-party logistics providers in the city. Partly for this reason, it is a great advantage for a third party logistics provider from the European Union who wants to establish business in Guiyang. The weaknesses for establishing include lack of infrastructure and long distance to the closest seaport. Furthermore, there is a plan for development in the region which includes the development of transport infrastructure.

Syftet med uppsatsen är att analysera ett tredjepartslogistiskt samarbete mellan en vinimportör och dennes distributör utifrån importörens perspektiv. Arbetet avser att lyfta fram vilken typ av relation som finns dem emellan. För att finna svaren till vår undersökning har frågor skapats utifrån valda teorier om partnerskap, samverkan och riskhantering. Frågorna har sedan ställts till personer som arbetar hos både vinimportören och distributören. Spontana samtal och en observation har genomförts i kontorsmiljön hos vinimportören. Vidare har ett studiebesök genomförts hos distributören för att studera deras lagerverksamhet. Efter analys av den empiri som vi erhållit och av utvalda teorier har vi funnit att samarbetet mellan vinimportören och distributören är mer av partnerskapskaraktär än det traditionella kund-/leverantörsförhållandet. Det som styrker detta är följande:

· Deras nuvarande relation baseras på ett ömsesidigt ge och ta.

· Det finns varken en inre konkurrens eller styrkemätning dem emellan.

· Partnerna gör vad de är bäst på inom respektive verksamhet

· Dessutom bedriver de inom vissa områden ett gemensamt utvecklingsarbete, vilket slutligen leder till en vinst för båda parter.

Vi har även funnit att stabiliteten i partnerskapet är hög, de har arbetat ihop under lång tid, men graden av närhet i partnerskapet kan anses vara låg. Dessutom visar studien att vin-importören och distributörens partnerskap bygger på mellanting mellan ett främjande och integrerat samarbete. Vidare har vi funnit att den miljö de verkar i är väldigt styrd av Systembolaget.

With the changes in the business environment, there has been an increasing dependence on the skills of companies to deliver customer adapted products quickly and on time around the world. Therefore, instead of being caught in the high cost and unsatisfactory result of managing logistics operation by themselves, many companies have chosen to outsource some or all of their logistics and supply chain activities to specialist third party logistics companies (TPL). Hence, the TPL companies are managing and integrating their customers’ supply chains to increase the competitiveness and profitability.  It is argued, that knowledge is becoming the only resource capable of offering competitive advantage and continued growth and prosperity for supply chain partners. Therefore, the effective transfer and creation of knowledge has become a top priority in a supply chain. Since third party logistics companies have taken on the major responsibility of managing customers’ supply chains, effective knowledge management has become a top priority for them as well.

The purpose of this thesis is to describe the knowledge transfer and creation processes within the third party logistics dyadic relationships in the context of supply chain integration.

The thesis has been carried out by using inductive and conductive research approaches and the qualitative study has been carried out by applying multiple case studies as a research strategy. The empirical material is gathered from four companies in two third party logistics relationships. Data was collected through several interviews conducted at the target companies and the findings have been analysed using the existing theory stated in the frame of reference.

The main conclusions from this study are that the buyer-seller context determines the way knowledge is transferred and created in the dyadic third party relationships, and the companies did not have any specific strategies or governance structures for managing knowledge although considered important. How the companies in the dyadic TPL relationships transfer and create knowledge changes with the evolvement of the relationship. Knowledge transfer must penetrate all companies and all organizational levels to increase a holistic and integrated understating of the whole supply chain to achieve value created. How TPL companies create and utilize knowledge internally vary due to company size and the practices used. In addition, the customer company using multiple TPL providers is able to transfer and create knowledge from all TPL relationships to increase the efficiency and effectiveness of its supply chain. Due to the buyer-seller characteristic, however, there are no or very little barriers for knowledge creation and transfer in a dyadic TPL relationship.

Third party logistics (TPL), the procurement of an integrated set of logistics services in a long-term relationship between a shipper (goods owner) and a service provider, is today a viable option for how companies carry out their logistics activities. Very little has been written on implementation or change issues in a TPL setting; these issues are identified as important, but not elaborated. There is however reason to believe that implementation of TPL arrangements, or rather establishment thereof, involves a complex change process involving substantial change for a wide range of actors in both the shipper’s and the provider’s organisation.

When comparing literature that deals with the TPL establishment process with a stream of research that is concerned with logistics change, it comes to light that there is a discrepancy between the theoretical and methodological foundations of the former works, and what is written in these pieces regarding the process. It is concluded that recommendations for how to manage the establishment process are given without being founded in a theory of process, or research designs capable of studying process. The theoretical underpinnings of TPL literature are founded in a view of change as a matter of conducting rational analysis and conceiving the strategically wisest decisions for the logistics system as a whole. Implementation is viewed as an unproblematic exercise of issuing directives to affected actors, asserting that all actors are rational, therefore rationally conceived decisions will be accepted and implemented accordingly.

Therefore the overarching purpose of this research is:

To explore the change process of third party logistics establishment

To fulfil this purpose the two streams of research mentioned above are combined. A meta-model of process consisting of the three interrelated dimensions content, context, and process forms the starting point for the study of process, but this is not sufficient for a study of change; a theory of change which is capable of capturing the mechanisms of the change process as it unfolds is also needed. Therefore the theory of change of the second stream of research mentioned above is adopted.

The theory of change encompasses three models of change, which are archetypical representations of the mechanisms underlying change processes according to different assumptions of what change is and how change comes about. These models are denoted the linear, the processual, and the circular. One important aspect of this theory of change is that the approach to change should be aligned with the extent oflearning requirements on the actors who are affected by or involved in the change. An actors perspective is therefore called for, and adopted in this thesis.

This thesis is the first step of a wider research effort concerned with studying the process of establishing TPL. Therefore, of the three dimensions of change, the contentdimension is excluded from study in this thesis. Governed by the meta-model of process, two research objectives are formulated:

To explore the context within which the TPL establishment process unfolds and describe the contextual dependence of this process

&

To describe the change process of TPL establishment in terms of the linear, processual, and circular models of change

The empirical investigation applied is a single-case retrospective study, in which the case is the establishment process between a Swedish company and an international TPL service provider. A total of fifteen actors have been interviewed; ten on the shipper side of the dyad, five on the provider side. Although the TPL establishment process is an interorganisational process, this thesis focuses on the intraorganisational process of the shipper, why the empirical material from the other side of the dyad is not used in this thesis, The interorganisational aspect, as well as the intraorganisational side within the provider’s organisation are nevertheless important, and will be included in future research.

The interviews were carried out in an unstructured manner, in which the interviewees were asked to retell the story from their own perspectives. Actors from varying positions, who were involved in the process, are included in the study; in the total sample all groups who were most affected or involved are represented. The interviews rendered ten stories of the studied process.

These stories were then analysed by means of a pattern-matching logic, in order to seek out the important contextual dependencies of the process, and to explore the mechanisms of the change process, as it evolved in context.

After having conducted this first step of the ongoing research effort, four main conclusions can be drawn:

- The TPL establishment process is context dependent.

- Not only rational mechanisms are at play in the process.

- It is important to acknowledge actors, not only systems.

- It is important to acknowledge the process, not only the decision.

The purpose of this thesis is to develop an integrated model which involves creative and analytical features for designing a cost effective logistics centre layout on operational level, with respect to time and space utilization. Engineering methods, creative skills, simulation and multi-criteria decision making methods were integreted in the  developed model. The model has been implemented and validated in Oskarshamn Intralog, which is a sister company of Scania. After applying the model in the case company, three different layout concepts were generated based on engineering and simulation techniques. These concepts were evaluated from utilization of space, time and flexibility aspects. Furthermore, multi criteria decision making method was used to select the most cost effective layout concept among these concepts. Different aspects helped to see various effects of warehouse operations on layout design. Simulation was used as a powerful tool to test cycle time within designed concepts. Clearly it was concluded that a combination of two concepts led to reach the expected results as an optimum point among space, time utilization and flexibility which fullfilled the answer to both academical and practical problem

Syftet med den här uppsatsen är att utveckla en integrerad modell som inbegriper kreativa och analytiska egenskaper. Modellen ska användas till att designa en kostnadseffektiv planering av anläggningen för ett logistikcentrum på en operationell nivå, med avseende på tid- och lagerplatsutnyttjande. Tekniska metoder, kreativitet, simulering, samt “multi-criteria decision making” är integrerade i modellen. Validering och implementering av modellen skedde på Oskarshamn Intralog, ett systerföretag till Scania. Efter tillämpning av modellen på fallföretaget, genererades tre olika koncept för planering av anläggningen. Koncepten utvärderades utifrån utnyttjande av plats, tid, samt flexibilitet. Dessutom har metoden “multi-criteria decision making” använts för att selektera det mest kostnadseffektiva av de tre koncepten. Olika aspekter på tid- och lagerplatsutnyttjande, samt flexibilitet bidrog till att se olika effekter på lagerhantering. Simuleringar genomfördes för att testa cykeltiden i de utvecklade koncepten. Slutsatsen är att en kombination av två koncept ledde till det förväntade resultatet; en optimal punkt för tid- och lagerplatsutnyttjande, samt flexibilitet, vilket uppfyller svar till de akademiska och praktiska problemen