BUSI613 Literature Review Article 1 - BAPONTE

And are more complex than the traditional logistics

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and are more complex than the traditional logistics supplier relationships and are typically long term partnerships between two companies where risks and rewards are shared (pg., 174). The use of 3PL providers taking over a company’s logistics is more predominant since its beginning in 1980 and has recently grown a $31 billion industry to an $85 billion industry (pg. 176). However, Armstrong and Associates (2010) estimated that US Fortune 500 companies would use 3PL providers with revenues amounting to $187 billion in 2007. The 3PL industry provides a particular challenge to understanding the way customers value different service components. Although companies have used outside firms to provide particular services, such as trucking and warehousing, these relationships had two characteristics: transactional based and single function. Also these key service components (transport, warehousing, etc.) are very complex, connecting physical movement of goods, IT system support and contact with service personnel, however a 3PL provider is able to bundle a broad range of services for different customers with different needs (Anderson et al, 2011). Relationships involved in a buyer-supplier exchange includes choices to outsource and supplier selection which can be perceived valuable among buyers (Anderson et al, 2011). There are many considerations that are critical in deciding whether an agreement should be entered into with a particular 3PL provider (Liberty, 2014, pg., 179).
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Running Head: BUSI613 JOURNAL ARTICLE REVIEW 4 3PL - Importance of Different Attributes Typically 3PL providers offer three competitive benefits: reduced cost, faster delivery and improved reliability (Anderson et al, 2011). There are several cited benefit of using 3PL providers such as it allows a company to focus on its core competencies, thus allowing providers the opportunity to focus on a particular area of expertise. Also, it provides the flexibility of
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