ASSIGNMENT 01 (3PL)

Read the article attached and answer the following questions according to your
understanding:
Q1) Through which network can the third-party logistics service providers
perform their expected roles?
ANSWER:
The network through which third-party can logistics services providers perform their expected
roles are the “Actors, Resources, and Activities (ARA) network/ model”.
This model was developed in 1992 by the industrial marketing and purchasing (IMP) group
and introduced as a model of business networks, to provide an effective framework to industries
for analyzing and studying long-term relationships and networks.
In third-party logistics, this network can play an important role by providing a simplified
structure that contains the information processed and interpreted from the system planning
software such as ERP software (Enterprise resource planning software) for initiating physical
operations. The ARA model is a combination of three basic elements that are:
Actors refer to the parts of the firm which are responsible for operations e.g. managers,
employees, laborers, etc. Resources refer to the tangible and intangible components such as raw
materials and technologies through which companies perform various operations while
Activities are production, logistics, administration, and transportation.
This model or network has great importance for third-party logistic providers (3PL) to manage
the supply chain in such ways that tangible materials can easily move to their right destination at
the right time as requested by their clients.
Q2) How do the third-party logistics service providers add value for their
customers through value–added services? Justify the answer with a local
example.
ANSWER:
The term “value-added service” is defined as a service adding an extra feature, form, or
function to the basic service. In simple words, the value-added services are used to accelerate
logistics operations such as the processes of moving finished goods that start from the
manufacturer to a distribution center, and then to the end user, so 3PL service companies provide
these facilities to large businesses for high-profit margins and in return, they facilitate the
targeted company in achieving their goals.
E.g. A person who owns a store that sells coffee beans, tea leaves of various kinds of tea such as
black tea, green tea, dried tea flower petals such as lavender, jasmine, rose, lilac, etc. The person
that owns the store can offer grinding services for coffee beans and brewing facilities as a value-
added service for dried flower petals to large-scale tea-selling companies or brands as the
chemicals present in petals require a certain temperature for their activation. The grinding,
brewing, and preservation cost should be mutually decided as both get to benefit from each
other.

Q3) How do logistics firms fulfill their expected roles?

ANSWER:
The logistics firm or third-party logistics provider (3PL) is commonly used for outsourced
logistical operations which include:
 Transportation.
 Warehousing.
 Materials procurement.
 Inventory management.
 Customs brokerage.
 Freight audit.
 Payment.
 Shipment tracking.

The expected roles that logistics firms fulfill daily are:

Shipping and Receiving: Logistics firms or 3PL providers are focused on the management of
the shipping process from start to end. These companies usually provide a transportation and
warehouse management system (TMS) and (WMS), or integrated freight management services.
These technologies are designed for achieving productivity and automating routes but also these
companies also give assistance for time-consuming tasks such as freight payment and
accounting. These companies also provide carrier relation management, freight data, and
matrix report for real-time visibility.
Transportation:
3PL providers are responsible for the actual transportation of goods between locations.
Through their transportation system, they manage the inventory shipments between the company
and the buyer.
Inventory management: These providers help the company in automating their inventory
operations by using an inventory management software system on their client’s (company)
inventory.
This facility helps companies to avoid dependency on inefficient and ineffective manual
processes and practices to predict customer demand.
Warehousing & Distribution:
3PL warehouse logistics providers are the most common types of third-party logistics providers.
These providers are integrated into a company’s warehousing and transportation procedures and
specialize in the storing and distribution of goods or services.
Help in receiving and organizing each SKU (stock keeping unit) in its warehouse for the
companies i.e. provide companies with both public and private warehouses through which
companies can easily save their time and capital whereas, in distribution, these companies or
service providers perform major operations such as distributing the inventory across the city or
country to ensure fast shipments.
Other services include outbound order fulfillment, picking and packing, custom labeling, and
manufacturing.