In the last 30 years, globalization has been a significant factor that has brought about a substantial increase in international trade, both import and export, which in turn has led to a surge in demand for various logistical services including third party logistics (PL). The objective of this assignment is to explore the following areas: A look at third party logistics (PL) in the context of the supply chain The development of pals over time Activities and functions outsourced to, and performed by pals How business add value to their goods and services by outsourcing to pals The Council of Supply Chain
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Management Professionals (SCAMS) defines Supply Chain Management as follows: Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies (SCAMS 2013). Pals are a subset of third party service providers mentioned above.
Plus can be defined as companies that are hired to perform logistics functions which have been conventionally performed within an organization (Guppy et al 2010 cited in Data et al 2013, p. 538). Pals originated in the sass’s as public warehousing facilities where free warehouse space was sold to businesses in the surrounding. In the sass’s this expanded into offering physical distribution services to further relations with existing customers. The next decade brought about an amalgamation in both warehousing and transportation services and the inclusion of warehouse management systems (Egghead 2003, p. ). Moving into the 21st century, traditional logistical services are commonly provided along with a list of new value added services, generally customer specific, such as final assembly, packaging, quality control and information technology to name a few (Skeet-Larson 2000, p. 1 12). According to Hertz and Alfresco (2003), pals can be categorized based on their customer development: Standard PL Provider Service Developer Customer Adapter Customer Developer Please see figure 1 below for description of the different PL categories. Outsourcing and Third Party Logistics By SmalltalkSee More on Logistics