SUP 3043

Supply Chain Operations Management

SUP 3043

Supply Chain Operations Management

Assignment #3: Third-Party Logistics Providers

DATE: 16-03-2024
INSTRUCTOR: Mehmet Basti
GROUP: Team Magma

STUDENT FIRST NAME STUDENT LAST NAME STUDENT NUMBER

Yamini Sravanthi Abbabathula C0885678
1
Deepali Dogra C0885608
2
Sheikh Sakib Hossain C0888296
3
Reynalyn Villacentino C0868259
4

Explain the services provided by information based 3PL providers.

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3PL or Third-Party Logistics providers have different types of schemes to offer. One of them is

the information-based 3PL service. It is one of the most important services offered by 3PL

providers in this era of technology. They mainly focus on providing information and technology-

based services. Some of their services from them are given below:

a. Business intelligence and data analytics: They use advanced tools to analyze the data

about inventory, transportation, and overall supply chain performances.

b. Supply chain visualization: They provide real-time visibility of the whole supply chain.

Thus, businesses can track the movement of their goods.

c. Inventory management: Through advanced technology, they provide inventory

management solutions.

d. Transportation and warehouse management system: They provide technologies

which can track the movement of products and services and warehouse management

systems.

e. Omni channel solutions: They can provide different types of software which integrates

online and offline sales Invalid source specified.

Explain the benefits clients/customers get by using Information-based 3PL providers type

of 3PL providers.

Third-party logistics (3PL) companies that are information-based concentrate on leveraging data

and technology to automate the management of supply chains, which offers a number of

economic advantages that benefit their customers and prospects. Here is a few of their major

benefits:

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1. Enhanced Visibility: Information-based 3PL (third-party logistics) businesses utilize

mart surveillance and tracking technology for real-time insight into the supply chain.

Through manufacturing till birth, clients may follow the progress of their products, so it

supports smarter scheduling and choice-making.

2. Data-driven Insights: These companies collect and evaluate massive amounts in data on

supply chain performance. By using analytics as intelligence tools for business, shortages

in the supply chain and abnormalities can be recognized. Relevant findings help

businesses boost output, decrease expenditures, and limit concerns (K, 2022).

3. Better Cooperation: Alternative to just serving as vendors, information-based 3PL

sellers regularly take on the position of tactical partnerships. Connectors make it simple

to have various stakeholders in the supply chain operate jointly, such as producers,

distributors, vendors, and merchants (GlobalTranz, 2019). They enhance collaboration

and optimize procedures by transmitting relevant knowledge, thereby improving total

synchronization.

4. Optimized Inventory Management: Businesses should better manage their supply

levels if they've access to timely and precise data (GlobalTranz, 2019). Information-based

third-party logistics, or 3PL, businesses enable businesses to achieve an optimal mix of

demand and supplies, thus lowering surplus stock and reducing stockouts while

maximizing the general turnover of stocks.

5. Successful Order Fulfillment: Information-based 3PL providers may streamline order

fulfillment procedures with the help of modern technology like transportation

management platforms (TMS) and warehouse management software (WMS) (K, 2022).

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 This enhances the productivity of selection and packaging, optimizes means of

transportation, and streamlines industrial structures.

6. Tailored Solutions: 3PLs that rely on data have the capacity to alter their services to suit

the distinctive needs and preferences of each customer. Companies recognize that within

the domain of handling supply chains and administration, there’s no one-size-fits-all

strategy. By taking advantage of data and technological advances, they are able to come

up with customized solutions that suit the distinct requirements and target all the

individuals they serve.

7. Continuous Improvement: Information-based logistics vendors that are third-party

devote themselves to creation and constant growth (GlobalTranz, 2019). stay ahead of the

evolving curve; they are continually looking for fresh technologies, market dynamics,

and optimal practices. It empowers the people they serve to retain their edge in a market

the fact that changes quickly with welcoming inventions.

In summary, data-driven 3PL providers supply clients with a wide variety of perks, which

include broadened transparency, insight based on data, enhanced partnership, customized

stock control, and successful processing of orders to increase gain.

Challenges involved in using the specified type of 3PL providers.

Despite the numerous benefits discussed above, it’s equally vital to acknowledge the potential

challenges associated with information-centric third-party logistics (3PL) providers. Any

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organization requires a detailed analysis before implementation to minimize its impact on a wide

range of supply chain activities.

Integration Complexity: Integrating new systems and technologies into an existing environment

can be time-consuming and challenging due to potential interface issues with various software

platforms like Warehouse Management Systems (WMS) and Enterprise Resource Planning

(ERP) systems. This could lead to additional delays and operational problems as it involves

continuous maintenance and technology compatibility considerations for a smooth transition

with different partners' platforms (A & Modarress, 2010).

Data Security Concerns: In any industry, data plays a key role in carrying out business

operations, and utmost attention is given to safeguarding one's privacy. Safeguarding sensitive

information from cyber threats and data leaks during transactions is the need of the hour and

concern of clients. A solid cyber security mechanism should be in place to offer data protection

by continuously monitoring potential threats from malware, ransomware, and data breaches

to combat and maintain a proactive security approach with effective training technique adoption.

Cost Implications: Deploying information-driven 3PL solutions often necessitates significant

expenditures in technology, infrastructure, and training, causing clients to carefully weigh

expenses against their financial constraints and expected ROI. Furthermore, protecting IT

systems necessitates significant money for comprehensive cybersecurity measures, possibly

straining financial resources (Hofmann & Osterwalder, 2017).

Skill and Expertise Requirements: Specialised skills and knowledge are required for efficiently

using complex data analytics and technology tools. To fully leverage the potential of a 3PL

supplier, clients may need to spend on staff training or hire external consultants. Staying updated

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with technology like as RFID is critical for increasing operational efficiency, but incorporating

these advances into existing systems necessitates careful planning and investment.

Change management: The introduction of new technology and procedures in the supply chain

often requires considerable changes to the organizational environment and workflow. Employees

or stakeholders may be resistant to these changes for the successful adoption of information-

based 3PL solutions.

Reliability uptime and downtime: Having a reliable backup system and contingency plans is

crucial for managing disruptions and maintaining operational continuity in the expanding

technology environment. Ensuring uninterrupted uptime is essential for smooth operations, yet

maintaining consistent availability and top performance of IT infrastructure can be difficult.

Regulatory compliance: When it comes to data protection and security, complicating with rules

and industry standards is crucial to compete and withstand the complexity and significance of

data security. Clients should ensure that the 3PL provider meets all applicable criteria.

Furthermore, preserving sensitive consumer data and adhering to strong data protection

requirements such as GDPR or CCPA increases complexity.

Supply Chain Complexity: Implementing information-based 3PL solutions may pose

challenges in efficiently managing large and ever-changing supply chains with multiple

stakeholders, locations, and variables. Clients operating in such environments may face

difficulties in achieving the necessary levels of visibility, coordination, and optimization across

the supply chain.

To summarise, overcoming these difficulties involves collaboration between clients and 3PL

providers, proactive risk mitigation, and continual improvement efforts. Despite the challenges,

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data-driven 3PL has enormous potential to improve supply chain performance and

competitiveness in the digital era. This includes prioritizing cybersecurity, improving IT systems,

guaranteeing regulatory compliance, forming partnerships with technology vendors, and always

innovating to satisfy client requests and industry standards (Kim, 2023).

Explain the criteria clients/customers use for selecting the specified type of 3PL

Information-based Third-Party Logistics (3PL) corporations are important to modern supply

chains because they offer expertise services that go beyond conservative transportation and

storage and incorporate advanced solutions using modern technology. Through streamlining their

logistic operation, enhancing supply chain visibility, and leveraging modern IT tools, software,

and data analysis, the provider supports the client to come up with wiser decisions. Customers or

clients assess the information-based third-party logistics (3PL) providers using several criteria to

guarantee that the supplier can meet, sustain, and fulfill their needs without any delay. Here are

some criteria that are necessary for selecting the providers:

1. Technological Proficiencies

Capability for Integration: THE 3PL’s ability to integrate and streamline their systems with the

client’s current ERP (Enterprise Resource Planning), WMS (Warehouse Management Systems),

Blockchain, and other software systems (Bulgurcu, B., & Nakiboglu, G., 2018).

Scalability: To satisfy the client and to meet their expanded business needs and demand,

provider must continuously improve their infrastructure and technology (Bulgurcu, B., &

Nakiboglu, G., 2018).

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Innovation: Adapting to modern technology such as blockchain, IoT, EDI, and AI will allow the

supplier to stay ahead of the competition in the global markets compared to their rival (Bulgurcu,

B., & Nakiboglu, G., 2018).

2. Reporting and Analytics of Data

Data Accuracy: The providers should have the capability to present fast, accurate, precise, and

relevant data or information to support the decision-making process, especially for major

projects (Bulgurcu, B., & Nakiboglu, G., 2018).

Custom Reporting: 3PL’s supplier must have the ability to provide a customized reporting

solution that aligns with client KPIs (Key Performance Indicators), and other specific

requirements needed (Rajesh Gupta, Anish Sachdeva, & Arvind Bhardwaj, 2011).

Analytics Forecasting: Are they capable of predicting possible supply chain disruptions,

changes, patterns, and demands using modern or contemporary analytics? This is one of the

essential criteria that every company is looking for a 3PL provider (Rajesh Gupta, Anish

Sachdeva, & Arvind Bhardwaj, 2011).

3. Openness and Visibility

Real-time Observation: Enhancing supply chain visibility and continuously providing

transparent data and real-time access to monitor or track the shipment, or any order in progress

and even the current level of inventory (Schneider, 2023).

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Supervisory Tower Services: A sophisticated 3PL provider usually provides control tower

services to present an entire view of the supply chain that exposes limitations, obstacles, risks,

and other areas that need to improve (Bulgurcu, B., & Nakiboglu, G., 2018).

4. Safety and Compliance

Security of Data: The provider should be able to fulfill robust cybersecurity measures to ensure

data privacy regulations as well as protect sensitive data without fail (Bulgurcu, B., &

Nakiboglu, G., 2018).

Observance of Rules: 3PL provider logistic operations and activities must comply with local,

regional, governmental, and international laws and avoid any violation to ensure smooth and

continuous operations (Bulgurcu, B., & Nakiboglu, G., 2018).

5. Client Support and Services

Responsiveness: Another criterion in choosing a 3Pl provider is the ability to provide quick

responses to any customer inquiry, questions, and other concerns and requirements of the

customer (Bulgurcu, B., & Nakiboglu, G., 2018).

Competency: 3Pl providers should have a deep knowledge related to supply chain processes,

rules, regulations, and law to assist and provide proper guidelines, assessments, and

recommendations to the customer (Bulgurcu, B., & Nakiboglu, G., 2018).

Agility: Every customer has different requirements, therefore a good 3PL provider should be

able to adapt and provide customized services to address the customer's needs (Bulgurcu, B., &

Nakiboglu, G., 2018).

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Reliable: One of the important aspects that every customer is looking for is the visibility and

transparency of shipment updates. The provider not just need to provide positive updates but

even negative updates because every customer is entitled to know the information related to their

shipment (Bulgurcu, B., & Nakiboglu, G., 2018).

Adherence to ISO: Complying with ISO or excellence in operation and services is important, by

this the customer will have the confidence that the provider is devoted and dedicated to the

service that they are provided, and they are committed to continuous improvement (Bulgurcu, B.,

& Nakiboglu, G., 2018).

6. Efficiency in Terms of Costs

Cost-effectiveness: Proper analysis and assessment on how much the total value provided

considering the potential increase in sales, and how much can be reduced in the expenses while

continuously improving efficiency. Executing proper analysis, providers can do a better analysis

on how to minimize expenses and maximize revenue without sacrificing the quality of services

provided (Bulgurcu, B., & Nakiboglu, G., 2018).

Fair Costing. It is important for every customer a clear, simple, and ethical pricing system and
they want to avoid any hidden charges therefore every provider is responsible for being ethical in
their pricing system (Rajesh Gupta, Anish Sachdeva, & Arvind Bhardwaj, 2011).

7. Sustainability

Accountability for the Environment: Our world is not polluted, and many customers are

supporting green works, as providers and individuals, we need to participate in sustainability by

making enough effort to reduce pollution using eco-friendly materials, and green technology and

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finding the most efficient route to reduce the consumption of fuel and carbon print

(Mathiyazhagan, 2018).

8. Experience and Reputation in the Industry

Tracking of Performance History: the competency of a good company in the same industry

can be measured by tracking the previous performance of delivering supply chain complexity

and logistic solutions (Bulgurcu, B., & Nakiboglu, G., 2018).

References from previous customers: 3PL providers with high ratings from their previous

satisfied customers demonstrate a good service that usually gets good testimonials or

recommendations that lead to new customers (Schneider, 2023).

9. Cultural Fit and Long-term Partnership

Examine the cultural value of your company and the 3PL provider if compatible. Building a

collaborative partnership between your company and the 3PL provider with one goal that is

focused on long-term relationships and the success of both parties.

Under the specific needs or requirements that align with the business goals of the company, an

in-depth analysis and considering other factors is required to figure out which information-based

3PL supplier is an excellent choice. These operations provide the opportunity to great impact on

a company’s supply chain resiliency, efficiency, and productivity.

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Give some real-world examples of the information-based type of 3PL providers.

There are several distinct types of third-party logistics (3PL) businesses. Information-based

3PLs, for instance, concentrate on offering logistic optimization solutions and technologically

driven services. Here are several real-life scenarios based on data logistics third-party providers:

UPS Supply Chain Solutions: Using modern technologies such as supply chain management

software, tracking equipment, as well as data analysis, UPS delivers a range of based on data

logistical services. The goods they sell enable enterprises greater control, superior storage and

distribution, and improved entire logistics economy.

DHL Supply Chain: DHL supplies based on data logistics services that feature the latest

technologies like warehouse management software, tracking in real time, and analytics that are

predictive. These innovations help companies make more informed choices, improve their

efficiency, and gain data on the supply chain.

FedEx Supply Chain: FedEx delivers data-driven advice, optimization of stock, and throughout

its entirety logistical visibility utilizing data-driven logistical solutions through the advantage of

information. The items they sell lower the costs, enhance the happiness of consumers and

improve procedures for companies.

C.H. Robinson: This global shipping organization provides logistic analytics, mathematical

modeling equipment, and logistics management systems (TMS) in addition to other data-driven

solutions. These innovations help companies minimize bills linked to shipping, improve their

logistical productivity, and streamline their transport route.

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XPO Logistics: XPO Logistics supplies technology-enabled based on data logistics services for

control of stocks, traffic optimization, and value chain insight. Their services can help businesses

boost satisfaction with clients, simplify procedures, and improve the accuracy of inventory.

These illustrations explain how, centered around information third-party logistics, or 3PL, firms

employ technological advances and information-driven decisions in order to optimize supply

chain operation and thereafter to achieve their goals.

References

A, A., & Modarress, B. (2010, August 4). Challenges of outsourcing logistics to third-party

providers. Retrieved from Inderscienceonline:

https://www.inderscienceonline.com/doi/abs/10.1504/IJLSM.2010.034426

Bulgurcu, B., & Nakiboglu, G. (2018, May 11). An extent analysis of 3PL provider selection. (U.

o. Shaofeng Liu, Ed.) Cogent Business & Management.

doi:https://doi.org/10.1080/23311975.2018.1469183

GlobalTranz. (2019). 3PL Services & Types of 3PLs Explained. Navigate to the GlobalTranz

website home pageGlobalTranz, 45-51.

Hofmann, E., & Osterwalder, F. (2017, November 4). Third-Party Logistics Providers in the

Digital Age:. Retrieved from MDPI: https://www.mdpi.com/2305-6290/1/2/9

K, T. (2022). Advantages of using Value-Added Services Provided by Your 3PL Partner. Lean

supply solutions, 48-96.

Kim, D. (2023, October 30). The Competitive Landscape for 3PL in 2024 and Beyond. Retrieved

from Autostore: https://www.autostoresystem.com/insights/the-3pl-landscape-key-trends-

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 and-challenges-for-2024

Mathiyazhagan, K. (2018, January). Assessment of criteria for the selection of third party

logistics provider: a case from India. International Journal of Logistics Systems and

Management. doi:DOI:10.1504/IJLSM.2018.10013181

Rajesh Gupta, Anish Sachdeva, & Arvind Bhardwaj. (2011). Criteria of Selecting 3pl Provider:

A Literature. International Journal of Industrial and Manufacturing Engineering, 5.

doi:doi.org/10.5281/zenodo.1075080

Schneider. (2023). What is 3PL? The ultimate guide to third-party logistics. Schneider Market

Update. Retrieved from https://schneider.com/resources/market-updates/ultimate-guide-

third-party-logistics-providers

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