See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/220297413

An Empirical Investigation of Third Party Logistics Providers in Thailand:

Barriers, Motivation and Usage of Information Technologies.

Article · January 2010

Source: DBLP

CITATIONS READS

3 149

3 authors:

Duangpun Kritchanchai Albert Tan

Mahidol University Universiti Teknologi MARA
43 PUBLICATIONS   435 CITATIONS    56 PUBLICATIONS   633 CITATIONS   

SEE PROFILE SEE PROFILE

Peter Hosie

70 PUBLICATIONS   795 CITATIONS   

SEE PROFILE

All content following this page was uploaded by Duangpun Kritchanchai on 11 September 2020.

The user has requested enhancement of the downloaded file.

 An Empirical Investigation of Third Party Logistics Providers in Thailand:
Barriers, Motivation and Usage of Information Technologies

Duangpun Kritchanchai, Mahidol University, Thailand

Albert Wee Kwan Tan, National University of Singapore, Singapore

Peter Hosie, University of Wollongong, Dubai, United Arab Emirates

ABSTRACT

Third Party Logistics (3PL) in Asia emerged as an important trend in logistical

management and Thailand continues to develop in this service rapidly. While a great
deal has been written about the dissemination of information technology (IT), few
empirical investigations address the use of IT in relation to 3PLs in Thailand. In this
article, the authors use an empirical study to investigate the profiles of 3PLs in
Thailand and their company strategies for providing logistics service and use of IT.
Survey results show that Thailand’s 3PL companies must expend more effort to
strengthen basic IT and infrastructure to enhance competitiveness. IT capabilities in
Thailand are increasing rapidly and its effective adoption has the potential to
significantly enhance the competitiveness of small 3PLs. Still many barriers exist to
the successful adoption of IT by these providers. Given the importance of such
companies in supply chain management, these issues must be fully understood.

Keywords: E-Commerce; Information Technology; Small 3PLs; Thailand; Third

Party Logistics (3PL)

INTRODUCTION
A Third Party Logistics (3PL) service represents more than a subcontracting or
outsourcing service. Typically, subcontracting or outsourcing covers only one product
(or a family of products) or one function that is produced by an outside vendor. In
contrast, the functions performed by 3PL providers cut across multiple logistics
functions. These functions can encompass the entire logistics process or, more
commonly, selected activities within that process.
Undoubtedly, the emergence of 3PL has become an important trend in
logistical management during the 1990s. While estimates vary concerning the size of
3PL, it is evident that opportunities for 3PL services will continue to grow. The Asian
logistics market is poised for robust expansion with its annual market growth rates
projected at 15% in Asia (TLI, 2003). Such high growth rates in Asia indicate the
high potential of supply chain development in this region, particularly in Thailand.
Thailand’s 3PL industry is developing rapidly and its service is gaining
demand by shippers. Such development is strongly encouraged by the government in
Thailand, which aims to develop the country into a premium integrated transport and
logistics hub. Leading edge terminal facilities combined with logistics management
competence are strengthening Thailand’s position as an international trading,
automotive and business hub.
There are a number of factors driving the growth of 3PL. Declining margins
and a tougher competitive environment, together with the recent positive attitude
towards outsourcing and focusing on core activities, are regarded as the strongest
drivers for the emergence of the 3PL industry. Many companies are outsourcing their
logistics operations to reduce costs, improve products, shorten lead time and enhance
competitiveness for their supply chain (Mentzer et al., 2001). Thus, companies need
to link electronically with suppliers or logistics providers to forge sophisticated inter
functional connections with key customers (Narasimhan & Jayaram, 1998).
Information Technology (IT) has become an important tool for implementing
supply chain management (SCM). It provides many essential applications in
improving performance in supply chain. Advances in IT have made it possible for
companies to develop and maintain the flexibility to respond quickly to changing
demands and conditions. Besides improving supply chain efficiency, IT including the
application of hardware, software and networks, can enhance information flow and
facilitate decision making in supply chain and logistics operations. The most dramatic
and potentially powerful uses of IT involve networks spanning any boundaries that
are capable of significantly enhancing the productivity, flexibility, and
competitiveness of many companies (Jun, Cai, & Kim, 2008).
A recent issue of the McKinsey Quarterly (Kanakamedala, Ramsdell, &
Srivatsan, 2003) reported that some companies making heavy investments in SCM
information systems actually performed worse than companies who did not invest in
the technology. This finding conflicts with the received wisdom that technological
investment in SCM will increase efficiency. Also, it contradicts what managers have
been repeatedly advised about the likelihood that IT will improve logistics operations.
In order to successfully adopt IT, companies must first streamline supply chain their
processes and fully understand how to leverage technology to improve its
performance.
Although IT in large 3PLs has been widely investigated (Larson &
Gammelgaard, 2001; van Hoek, 2000) there is still a shortage of research in the field
of small 3PLs. Minimal empirical investigation has been undertaken to analyze the
adoption of IT by these companies. An empirical investigation was warranted given
the limited quantitative evidence available on the usage of IT by small 3PL companies
in Thailand.
The purpose of this study is to investigate the status of IT in the Thailand
logistics industry and identify IT usage trends in the region. It is undertaken to
achieve three specific objectives:
(1) To identify the profile of 3PL companies, their markets and services
offered in Thailand.
(2) To identify the 3PL company strategies and the performance
measurements used by them.
(3) To understand the types of IT used by 3PL, their motivations and barriers
for deployment.
Following this introduction, a brief literature review of IT usage by 3PL provides is
undertaken. The subsequent sections provide a profile of the respondent and their
markets, followed by an analysis of IT usage by these companies. A mail survey was
used to investigate IT usage from a sample size of 72 3PL companies throughout
Thailand. The main research findings from the data collected are then presented. The
concluding section discusses the managerial implication on the adoption of IT for
small 3PLs.
LITERATURE REVIEW
3PL companies provide outsourced or logistics services to companies for an aspect, or
sometimes all of their SCM functions. 3PL logistics providers typically specialize in
integrated warehousing and transportation. These services are capable of being
systematically scaled and customized to clients needs in response to market
conditions which determine the demands and delivery service requirements for
products and materials. Four categories of 3PL providers are identified by Hertz and
Alfredsson (2003):
1) Standard 3PL providers are the most basic form of service offered. Activities
performed include the most basic functions of logistics ‘picking and packing’,
warehousing, and distribution. 3PL functions are not the main activity of these
companies.
2) Service developers 3PL providers offer customers advanced value added
services in the form of: ‘tracking and tracing’, cross docking, specific
packaging, or a unique security system. A strong IT platform, combined with a
focus on economies of scale and scope, enable this type of 3PL provider to
undertake these tasks.
3) Customer adapters are a form of 3PL provider which responds to requests
from a customer to take complete control of the company’s logistics activities.
New logistics services are not provided or substantially improved and the
customer base is typically quite small.
4) Customer developers are the highest level 3PL provision with respect to its
processes and activities. A 3PL provider integrates its activities with the
customer and controls the entire logistics function. Extensive and detailed
tasks are performed for a few providers.
A variety of benefits and risks in relation to 3PL have been reported in the literature.
These can be classified as strategy, finance and operations related. Outsourcing non-
strategic activities enables companies to focus on their core competences and exploit
external logistical expertise (Sink & Langley, 1997). 3PL providers can also
contribute to improved customer satisfaction and provide access to international
distribution networks (Bask, 2001). The most often cited risks are associated with loss
of control over the logistics function and loss of in house capability and customer
contact (Ellram & Cooper, 1990). However, usually shippers employ a mixed strategy
regarding logistics and retain important logistics activities (e.g, order management) in
house (Wilding & Juriado, 2004). Users of 3PL reported enhanced flexibility with
regard to market (investments) and demand (volume flexibility) changes. Lack of
responsiveness to customer needs is also cited as a problem of outsourcing (van
Damme & Ploos van Amstel, 1996).
The literature focuses on the demand side of 3PL; a large number of studies
have investigated the extent of 3PL usage across specific countries/regions and
industries. A series of annual surveys conducted in the USA by Lieb and colleagues
(Lieb, 1992; Lieb & Bentz, 2004, 2005; Lieb et al., 1993; Lieb & Miller, 2002; Lieb
& Randall, 1996) is a well known example of such an approach. The main issues
examined by such studies include services used, usage rate, contract renewal rates,
outsourcing costs and geographical spread of services (Lau & Ma, 2008). Generally
speaking, findings indicate the prominence of transport, warehouse and administration
related (e.g,, freight payment) services and confirm the continuing growth of logistics
outsourcing (Ashenbaum et al., 2005; Lieb & Bentz, 2005; Murphy & Poist, 1998).
Research regarding 3PL usage also includes experience from specific
countries or industries. Country specific studies stress the prominence of transport and
warehousing services and also identify other activities with growth potential.
Examples include: Australia (Dapiran et al., 1996; Sohal et al., 2002); China (Hong et
al., 2004); Malaysia (Sohail & Sohal, 2003); Mexico–US border (Maltz et al., 1993);
New Zealand (Sankaran et al., 2002); and Singapore (Bhatnagar et al., 1999).
IT systems are increasingly being used to offer real time information to clients
in logistics industry to enhance visibility for supply network members (Tan, 1999;
Lewis & Talalayersky, 2000; Piplani et al., 2004; Sauvage, 2003). Subsequently, this
has a massive impact on all business areas, especially transportation and distribution
(Lewis & Talalayevsky 2000; Milligan 2000). The reasons for the exponential growth
in the use of IT are summarized below:
 Significant reduction in assets, such as inventories and equipment;
 More effective management of information, products, and cash flows among
supply chain partners; and,
 Dramatic reduction in the cost of IT throughout the 1900s and from 2000.
The number and types of technology that exist to facilitate logistics operations
continues to grow at a rapid pace. However, certain technologies have become critical
components of the logistics and SCM functions. For example, in the area of traffic
management, companies use the web or the Internet for communicating by email,
tracking and tracing shipments, obtaining industry and carrier news and information,
and conducting database searches. More than 50% of all transactions between carriers
and their customers are estimated to be dealt with over the Internet (Stock and
Lambert 2001). It is fast becoming the primary interface mechanism for Business-to-
Business (B2B) and Business-to-Customer (B2C) transactions because transportation
companies can quickly offer broad service and market reach capabilities.
The Internet and related web services have become strategic tools in
determining success of SCMs. Companies use Internet sites to provide potential
customers with product and price information. Many carriers have developed Internet
sites to allow customers to track their shipments. In addition, companies use Internet
based systems to share demand and production forecasts. Issues of capacity and
security are challenges remaining with the use of the Internet for transportation and
distribution transactions.
Another example would be the logistics information systems which can be
categorized into four groups (Haverly & Whelan 1996):
1) Transactional analysis: Allows management to monitor costs and service by
providing historical reporting of key performance indicators, such as carrier
performance, shipping modes, traffic lane use, premium freight usage, and
backhauls;
2) Traffic routing and scheduling: Provides features such as the sequence and
timing of vehicle stops, route determinations, shipping paperwork preparation,
and vehicle availability;
 3) Freight rate maintenance and auditing: Maintains a database of freight rates
used to rate shipments or to perform freight bill auditing; and,
4) Vehicle maintenance: Features commonly provided by these packages include
vehicle maintenance scheduling and reporting.
Depending on the size of the 3PL companies, the level of technology use will vary
between and within companies (Neureuther & Kenyon, 2008). Despite such variation,
it is clear that the use of technology is expanding at a rapid pace in the area of
transportation and distribution, and it will continue to grow well into the future (Sahay
& Mohan 2006; Cabdoi 2003; Frost & Sullivan 2003). Despite the fact that much has
been written about the dissemination of IT, there is still a shortage of quality research
in the field of small 3PLs with little empirical investigation into the usage of IT by
them. This article is intended to this growing contribute knowledge base and suggests
some possible research directions.

RESEARCH METHODOLOGY
Five hundred (500) questionnaires were selected randomly from a logistics
association database and were sent to their members by mail with a pre paid envelope
attached. There were 72 valid responses, collected making a response rate of 14%.
Some of the respondents indicated they are operating in more than one core logistics
business (three key areas namely; Transportation, Warehousing or Freight
Forwarding) and thus resulted in the total number of responses exceeding the number
of respondents as shown in Table 1.

Table 1, Percentage of core logistics businesses operated (n = 72)

Core logistics business No. of Percentage
responses

Transportation 32 37.7

Warehousing/ Distribution 17 20.0

Freight Forwarding 36 42.3

Total 85 100

PROFILE OF 3PL COMPANIES

Turnover and Staff Size of 3PL Companies
Seventy one percent (71%) of the respondents had an operating revenue of less than
25 million in Thai baht (US$794,000) in year 2005. Close to 28% of the respondents
have operating revenue of between 26 to 500 million in Thai baht (US$825,000 to
US$15.8 million) and only 2% has more than 500 million baht of operating revenue.
Thus, the respondents are skewed towards the small and medium size enterprise
(SME) with exception of a few large companies. The majority of respondents (90%)
were local companies with the rest emanating from the USA, Europe and Asia.
As shown in Table 2, close to 70% of respondents have less than 25 employees
while 25% had 25 to 100 employees. Only a small percentage of the respondents have
more than a 100 employees. Interestingly, 37% do not have any employee for IT and
close to 61% have only 1 to 10 IT employees. This could be due to the fact that most
of the respondents are SMEs.

Table 2. Staff Size of 3PL Companies

Employment Percentage
Total number of employees

1 – 25 employees 69.6

26 – 100 employees 24.6

101 – 200 employees 4.4

More than 200 employees 1.4

Number of employees in IT function

None

1 – 3 employees 37.7

4 – 10 employees 40.5

11 – 20 employees 20.1

More than 20 employees 1.4

3PL Services
From Figure 1, it is observed that almost all of 3PL companies attempt to provide as
wide a range of 3PL services to their clients as possible. This can be seen from the
numerous types of 3PL services offered by the companies. The most readily available
3PL services offered include basis services such as: customer service (81%), traffic
and transportation (77%), packaging (40%), logistics communication (36%), and
warehousing and storage (29%). In contrast, the least readily available 3PL services
on offer are: parts and service support (4%), order processing (5%), demand
forecasting (6%), plant and warehouse site selection (8%) and material handling (9%).

Figure 1. Types of Logistics Services Provided

3PL Industries and Customers
The range of industries that the 3PL companies are currently serving is shown in
Figure 2. As observed, mechanical, chemical, textiles, electronics, consumer goods
and beverages are the major industrial sectors that most 3PL companies render their
services to. Paper and Health logistics are the minority industrial sectors serviced by
these 3PL companies.

Figure 2. Industries Served by 3PL Companies

Finally in terms of customer composition, Figure 3
companies (50%) served between 20 to 99 customers
are serving more than 100 customers. This confirms
their services to a few customers and with the
transforming themselves into 4PLs.
indicates that majority of the
while only 8% of respondents
the trend for 3PL to dedicate
ultimate goal of eventually

Figure 3. Customer composition for each 3PL

COMPANY STRATEGIES AND METRICS FOR LOGISTICS SERVICE

The top three strategies adopted by the companies are: time based logistics (79%),
logistics performance (79%) and strategic alignment of IT (72%) respectively as
shown in Figure 4. In contrast, 49% does not agree on establishing partnership with
rewards and risks. The current trend clearly favors players with strong solutions
background, backed by strong process management and IT support infrastructure.
Fifty two percent (52%) of respondents have indicated that they measure their
logistics performance. The top three logistics metrics are: on time delivery (74%),
accurate, complete and damage free delivery (59%) and data accuracy (39%)
respectively as shown in Figure 5. In contrast, order cycle time is not commonly
measured by these companies.
 Figure 4. Strategies adopted by companies

Time based logistics 9.40

79.70
solutions
Logistics performance 79.10
3.00
measurements
Strategic alignment of IT 72.30
4.60
Business partnerships 70.60
7.40
Standardization 7.70
64.60

Logistics is one of core 8.00

61.90
strength
Postponement strategies 60.30
9.60
Process reengineering 60.00
10.80
Reverse logistics 53.20
12.90
25.40
Partnership with reward and 49.20
risk
0 20 40 60 80 100
Frequency(%)

Disagree Agree

Figure 5. Metrics for Logistics performance

On-time delivery 57 8.6 8.6

Accurate, complete & damage-

5.7 23 31
free delivery
Data accuracy 14 8.8 17

Actual spending vs budget 5.7 17 14

Return on investment 2.9 20 2.9

Back-orders 11 2.92.9

Employee productivity 2.92.92.9

Inventory turnover 2.9 5.7

Space utilization 2.92.9

Order cycle time 2.9

0 20 40 60 80
Frequency(%)

Most important 2nd Most important 3rd Most important

IT MOTIVATIONS, BARRIERS AND USAGE
Reacting to the trend towards greater use of e-commerce, most companies see the
need to leverage IT, e-commerce and infrastructures. The top three prime motivators
for adopting IT by the respondents are: reducing data entry errors (critical: 28%),
decreasing labour cost (critical: 28%) and reducing order cycle time (critical: 28%)
respectively as shown Figure 6. This could be due to growing pressure from
customers for 3PL to install information systems to support their logistics services in
order to increase data accuracy, cut costs, increase visibility and shorten delivery
time.
The top three barriers to usage of IT for 3PL companies are: lack of education
(agree: 71%), integration with legacy system (agree: 65%) and unaware of new
technology (agree: 58%) respectively as shown in Figure 7. In contrast, 68% of the
companies do not agree that IT is not a necessity. Most organizations are treating IT
as an essential tool for productivity.

Figure 6. Prime motivators for adopting IT

Reduce data entry errors 28.8 43.9 27.3

Decrease labour cost 28.8 40.9 30.4
Reduce order cycle time 28.4 46.3 25.4
Better visibility 21.5 49.2 29.3
Part of BPR 20 40 40
Time payment from suppliers 18.2 63.6 18.2
More predictable delivery 18.2 51.5 30.4
Customer pressure 18.2 42.4 39.4
Reduce inventory 15.4 33.8 50.8
Supplier pressure 12.5 25 62.5
Corp policy 9.1 39.4 51.5

0 20 40 60 80 100
Frequency(%)

Critical Important Minor/ Negligible

 Figure 7. Barriers to IT usage
Lack of education 7.5
71.6
Integration with legacy systems 18.2
65.2
Unaware of new technology 13.5 58.2
Organization 15.2
56.1
Financial justification 15.4
55.4
Too many industrial standard 15.4
52.3
Lack of IT capability of business partners 22.7
50
Insufficient IT resources 20.9
49.3
Rapid obsolescence 30.4 47
Commercial solution do not meet needs 21.2
46.9
Quantifying intangible benefit 13.9
43.1
Long implementation time 15.2
40.9
Lack of management support 19.7
40.9
Bad experience with vendors 26.9
40.3
Small response time of network 24.229.1
High failure rates of implementation 47.7
23
Not a necessity 68.2
18.2

0 20 40 60 80
Frequency(%)
Agree Disagree

In term of implementation of basic IT applications for transactional activities, 71%

have implemented or are implementing financial management system, 44% have
implemented or are implementing inventory management system and 40% have
implemented or are implementing purchasing management systems as shown in
Figure 8. The least implemented system is the production control system.

Figure 8. Implementation of Transaction Systems in 3PL companies

 Financial management 71.2 19.7 9.1

Inventory management 44.7 15.4 40

Purchasing management 40 12.3 47.7

Sales order processing 29.3 9.2 61.5

Production control 28.2 9.4 62.5

0 10 20 30 40 50 60 70 80 90 100
Frequency(%)

Implemented/ Implementing Plan to implement No plans

In the case of IT applications specializing on logistics operations, 72% have

implemented or are implementing transportation management system, 43% have
implemented or are implementing distribution resource planning system and 41%
have implemented or are implementing warehousing management system as shown
in Figure 9. It is not surprising that transportation management systems are the most
commonly implemented system since 77% of the respondents are offering traffic and
transportation services as shown in Figure 9.

Figure 9. Implementation of Logistics Systems in 3PL companies

Transport management system 72.1 22.1 5.9

Distribution resource planning 43 20 36.9

Warehouse management system 41.5 18.5 40

Customer service and returns 40.3 11.3 48.4

0 20 40 60 80 100
Frequency (%)

Implemented/ Implementing Plan to implement No plans

In order to find out how ready the 3PL companies in Thailand are in embracing e-
commerce, the respondents are asked to indicate their range of e-commerce services
that they are currently offering or planning to offer to their clients. The majority of
companies (80%) use e-commerce to monitor their delivery service, 40% uses e-
commerce to track and trace service, and 30% use e-commerce to check stock status
and to provide pre alert services as shown in Figure 10.

Figure 10. Services using e-commerce

Delivery monitoring service 80

Checking stock status online 30

Track and trace 40

Pre – alert service 30

0 20 40 60 80 100
Frequency (%)

Respondents were asked to indicate their achievements from the use of their IT
systems. The top three achievements indicated are: improve data quality (agree: 80%),
cost reduced (agree: 75%) and more reliable delivery (agree: 75%) as shown in Figure
11. With information sharing and exchange using the Internet, the data quality is
expected to improve as compared to manual systems.

Figure 11. Company achievements through implementing IT

3 .3
Improved quality of data 80

13 . 7
Cost reduced 75 . 9

10 . 7
More reliable delivery 75

Performance measurements available more timely 6 .6

73 . 3

Achieved performance goals 13 . 3

73 . 3

10 . 3
Short order cycle 72 . 4

Enhanced process performance 10

63 . 3

24 . 1
Reduced system inventory 41 . 4

Reduced reliance on forecasting 36 . 7

26 . 6

0 10 20 30 40 50 60 70 80 90
Frequency (%)
Agree Disagree
According to Lewis and Talalayersky (2000) most 3PL companies readily adopt IT
but fail to realize that the right people and processes are ultimately the key critical
success factors. The logistics industry is a service industry and therefore people are
the crucial competitive factor since it is people who utilize IT tools. Figure 12 shows
that top three important IT skills for personnel in 3PL companies to support their
logistics operations. They are namely: word processing (agree: 78%), spreadsheet
(agree: 78%) and operating system (OS) (agree: 78%). It is no surprise that word
processing is listed as the most important IT skill since 3PL services will need to
prepare a lot of documents for their shippers for export and import declaration.
Spreadsheets are considered the next most important skill as the 3PL needs to
consolidate information from many different IT systems in order to provide accurate
information on the status of shipment details to shippers.

Figure 12. Important IT skill for logistics operations

Word processing 10 . 7
78 . 6

Spreadsheet 10 . 7
78 . 5

Operating systems 8 .5
78

Networking 11 . 5
71 . 9

Decision Support Systems 15 . 3

66 . 1

EDI 22 . 8
61 . 4

ERP 32 . 1
44 . 7

Software development 42 . 1
40 . 4

Trade document processing 35 . 2

38 . 9
45 . 2
MRP II 34

0 10 20 30 40 50 60 70 80 90
Frequency (%)

Most important Least important

SUMMARY OF FINDINGS
This research has provided an overview of IT utilization by the 3PL companies in
Thailand. The readiness of industry in Thailand to adopt IT in SCM is moderate
compared to other developed countries (Singapore, USA, etc). These findings show
that IT is an essential tool in reducing operation cost, improving quality of data, and
increasing the consistency of company’s delivery. In fact, most of the respondents
disagreed that IT is not a necessity in today’s competitive environment where shippers
expect real time information about their inventory and shipment status.
These findings also reveal that 3PL companies in Thailand have been investing
in basic transactional and logistics information systems to enhance their business
processes. Most of the respondents plan to improve their business processes and their
logistics performances by using IT. However, most of the respondents either have no
IT staff or only a few IT staffs to assist in the implementation of such systems. Unless
they are expecting to outsource the IT implementation to the IT vendor, it is hardly
possible for these SME companies to be able to handle such large scale IT
implementation projects. Furthermore, with a lack of IT knowledgeable and staffs, it
is evident that most of the companies will not be capable of integrating their IT
systems with other legacy systems as indicated by them as barriers for IT
implementation.
Most logistics companies have several legacy computer systems to serve
different needs, such as for order recording, order delivery, and so on. Currently, each
client has a separate database that is operated independently of the information
systems of other clients. The trend is to migrate to a more advanced and integrated IT
system that will give 3PL companies the scope to expand their operations. The
process of changing IT systems involves examining the business process and
considering process reengineering before deciding on the architecture of the IT
system for the companies.
The ultimate plan is to integrate the IT system with the web so that a web based
logistics information system can be made available over time for their shippers. Most
3PL companies are in the processes of migrating to a web based information system
with a common interface for all their clients. However, this standardization can be
accomplished only with the cooperation of all clients.

CONCLUSION
3PL is growing around the world as more and more corporations prefer to outsource
their logistics operations to the 3PL or logistics service providers. The 3PL market in
Thailand is highly fragmented but there is also a high potential for growth of the
market, which was evident from the research. More companies in Thailand are
becoming aware of the benefits of 3PL and are outsourcing a part or whole of their
logistics related activities to service providers.
This research has provided an overview of 3PL companies, mainly SME and
their markets and IT implementation status. The majority of companies surveyed have
implemented the basic IT systems but in order to compete with the larger companies,
they will need to consider investing more in this area as well as in IT manpower. They
should develop an IT system that is flexible and able to accommodate legacy data,
Internet and related web based services logistics information systems. Web based
information will help to reduce communications barriers such as complex logistics
operational systems. Both financial and non financial factors, including tangible and
intangible factors, should be considered when justifying investments in IT projects.
Such investments should not simply be based on financial performance measures such
as ROI.
Currently, 3PL companies in Thailand receive only some support for training
and education. Government support is needed to train and educate employees in small
logistics companies. In addition, educating the customers on how to use the logistics
information system will certainly improve levels of customer satisfaction.
In conclusion, the competitive landscape for small 3PLs is continuously
changing to reflect evolving customer requirements and other business pressures. The
capability of emerging IT is increasing at a rapid rate and its effective adoption has
the potential to significantly enhance the competitiveness of small 3PLs. However, it
is clear that many barriers exist to the successful adoption of IT by these providers.
Given the importance of such companies in contemporary supply chain
configurations, it is important that these issues are fully understood and resolved
where possible.
REFERENCES
Ashenbaum, B., Maltz, A. B., & Rabinovich, E. (2005). Studies of trends in third
party logistics usage: What can we conclude? Transportation Journal, 44(3), 39-50.

Bask, A. H. (2001). Relationships between 3PL providers and members of supply

chains – a strategic perspective. Journal of Business and Industrial Marketing. 16(6),
470-486.

Bhatnagar, R., Sohal, A., & Millen, R. A. (1999). Third party logistics services: A
Singapore perspective. International Journal of Physical Distribution and Logistics
Management, 29(9), 569-587.

Cabdoi, C. (2003). Fourth party logistics market: A European perspective. 1 Dec

2003. Retrieved March 3, 2009, from
http://www.frost.com/prod/servlet/market-insight-top.pag?docid=8341069

Dapiran, P., Lieb, R. C., Millen, R. A., & Sohal, A. (1996). Third party logistics
service usage by large Australian firms. International Journal of Physical
Distribution and Logistics Management, 26(10), 36-45.

Ellram, L. M., & Cooper, M. C. (1990). Supply chain management, partnerships and
the shipper-third party relationship. International Journal of Logistics Management,
1(2), 1-10.

Frost & Sullivan. (2004). Fourth-party logistics: Turning a cost into a value
proposition. Retrieved March 3, 2009, from
http//www.ebizq.net/topics/scm/features/3881.html

Hertz, S., & Alfredsson, M. (2003). Strategic development of third party logistics
providers. Industrial Marketing Management, 32, 139-149.

Hong, J., Chin, A., & Lin, B. (2004). Logistics outsourcing by manufacturers in
China: A survey of the industry. Transportation Journal, 43(1), 17-25.

Jun, M., Cai, S., & Kim, D. (2008). The strategic implications of e-network
integration and transformation paths for synchronizing supply chains. International
Journal of Information Systems and Supply Chain Management, 1(4), 39-59.

Kanakamedala, K., Ramsdell, G., & Srivatsan, V. (2003). Getting supply chain
software right. The McKinsey Quarterly.

Larson, P., & Gammelgaard, B. (2001). Logistics in Denmark: A survey of the

industry. International Journal of Logistics: Research and Applications, 4(2), 191-
205.
Lau, Kwok, H., & Ma, W. L. (2008). A supplementary framework for evaluation of
integrated logistics service provider. International Journal of Information Systems
and Supply Chain Management, 1(3), 49-69.

Lewis, I., & Talalayersky, A. (2000). Third party logistics: Leveraging information
technology. Journal of Business Logistics, 21(2), 173-185.

Lieb, R. C. (1992). The use of third-party logistics services by large American

manufacturers. Journal of Business Logistics, 13(2), 29-42.

Lieb, R. C., & Bentz, B. A. (2004). The use of 3PL services by large American
manufacturers: The 2003 survey. Transportation Journal, 43(3), 24-33.

Lieb, R. C., & Bentz, B. A. (2005). The use of 3PL services by large American
manufacturers: The 2004 survey. Transportation Journal, 44(2), 5-15.

Lieb, R. C., Millen, R. A., & Van Wassenhove, L. N. (1993). Third party logistics: A
comparison of experienced American and European manufacturers. International
Journal of Physical Distribution and Logistics Management, 23(6), 35-44.

Lieb, R. C., & Miller, J. (2002). The use of 3PL services by large American
manufacturers: The 2000 survey. International Journal of Logistics: Research and
Applications, 5(1), 1-12.

Lieb, R. C., & Randall, H. L. (1996). A comparison of the use of third-party logistics
services by large American manufacturers, 1991, 1994 and 1995. Journal of Business
Logistics, 17(1), 305-20.

Maltz, A. B., Riley, L., & Boberg, K. (1993). Purchasing logistics in the US-Mexico
transborder situation: Logistics outsourcing in the US-Mexico co-production.
International Journal of Physical Distribution and Logistics Management, 23(8), 46-
55.

Mentzer, J., Dewitt, W., & Keebler J. (2001). Defining supply chain management.
Journal of Business Logistics, 22(2), 1-25.

Murphy, P. R., & Poist, R. F. (1998). Third-party logistics usage: An assessment of

propositions based on previous research. Transportation Journal, 37(4), 26-35.

Narasimhan, R., & Jayaram, J. (1998). Causal linkages in supply chain management:
An exploratory study of North American manufacturing firms. Decision Sciences,
29(3), 579-605.

Neureuther, B. D., & Kenyon, G. N. (2008). The impact of information technologies

on the US beef industry's supply chain. International Journal of
Information Systems and Supply Chain Management, 1(1), 48-65.
 Sahay, B. S., & Mohan, R. (2006). 3PL practices: An Indian perspective.
International Journal of Physical Distribution and Logistics Management, 36(9), 666.

Sankaran, J., Mun, D., & Charman, Z. (2002). Effective logistics outsourcing in New
Zealand: An inductive empirical investigation. International Journal of Physical
Distribution and Logistics Management, 32(8), 682-702.

Sauvage, T. (2003). The relationship between technology and logistics third-party

providers. International Journal of Physical Distribution and Logistics Management,
33(3), 236-253.

Sink, H. L., & Langley, C. J. (1997). A managerial framework for the acquisition of
third-party logistics services. Journal of Business Logistics, 18(2), 63-89.

Sohail, M. S., & Sohal, A. (2003). The use of 3PL services: A Malaysian perspective.
Technovation, 23, 401-408.

Sohal, A., Millen, R. A., & Moss, S. (2002). A comparison of the use of 3PL services
by Australian firms between 1995-1999. International Journal of Physical
Distribution and Logistics Management, 32(1), 59-68.

Stock, J. R., & Lambert, D. M. (2001). Strategic Logistics Management (4th ed.). New
York: McGraw-Hill.

Tan (1999). The use of information technology to enhance supply chain management.
Production and Inventory Management Journal, 40.

Transportation and Logistics Institute (TLI). (2003). Report on the working group on
logistics: Developing Singapore into a global integrated logistics hub.

van Damme, D. A., & Ploos van Amstel, M. J. (1996). Outsourcing logistics
management activities. International Journal of Logistics Management, 7(2), 85-95.

van Hoek, R. (2002). Using information technology to leverage transport and logistics
service operations in the supply chain: An empirical assessment of the interrelation
between technology and operation management. International Journal of Information
Technology and Management, 1(1), 115-130.

Wilding, R., & Juriado, R. (2004). Customer perceptions on logistics outsourcing in

the European consumer goods industry. International Journal of Physical Distribution
and Logistics Management, 34(8), 628-644.

View publication stats