Third Party Logistics (3PL): A new way of Management

Abstract

Nowadays, many companies rely heavily on outsourced services and suppliers that contribute to the production process in one or more ways. Logistics outsourcing aims to achieve fundamental objectives that are at the heart of a company’s profitability and success. As a result, third-party logistics (3 PL) providers are important to them. This study aims to identify the chances of success of outsourcing to third-party logistics providers. The target population of the study are the agricultural enterprises in the Souss Massa region (Morocco) and surroundings. The main objective of this research is to develop a strategic framework for outsourcing success that takes into account three process enablers: the governance mechanism, the selection criteria for third-party logistics and the measurement of its performance.

In fact, the focus about outsoursing studies and littérature outsourcing studies is mainly on the reasons for outsourcing, outsourced activities, 3PL selection criteria and success factors of outsourcing. Some researchers argue that outsourcing logistics is a business risk whose success is far from reality. It is still not clear what guarantees successful outsourcing, as shippers have many strategic reasons for 3 PL.

Although the reasons for outsourcing companies are less likely to guarantee their success, these factors are seen as contributing to the success of outsourcing. This study establishes the impact of these three factors on the success of outsourcing and also explains how closely they are related to the reasons for 3PL.

This study establishes the impact of these three factors on the success of outsourcing and also explains how closely they are related to the reasons leading to third part logistics. This research identifies a governance mechanism that includes a collaborative approach of both parties and mutual conflict resolution as a tool to avoid conflicts. The second factor concerns the 3PL selection criteria that allows the good match between the company and the service provider. The third factor is service provider’s performance assessment, which includes strategic planning measures, supplier measures, performance’s measures, etc. etc.

This study provides both theoretical and practical contributions. Theoretically, it gives an idea of the empirical framework for the success of strategic outsourcing with identified enabling processes that help providers to achieve their outsourcing goals. These study variables are conceptualized, defined and tested for their significant relationships using structural equation modeling, an analysis technique rarely used in the outsourcing literature.