Third Party Logistics Impact and Challenges

This assignment delves into the significant impact and challenges associated with Third-Party Logistics (3PL). It explores the motivations behind businesses outsourcing logistics functions to third-party providers, analyzing the benefits and drawbacks of such arrangements. The paper further examines various factors influencing the success and effectiveness of 3PL implementation, including information sharing, process coordination, and trust between parties. By considering these aspects, the assignment provides a comprehensive understanding of the role and complexities of 3PL in modern supply chain management.

THE EFFECT OF 3PL OUTSOURCING ON THE
PERFORMANCE OF FMCG COMPANY (IRELAND)
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Table of Contents
Introduction......................................................................................................................................3
Research aim................................................................................................................................3
Objectives.....................................................................................................................................3
Research question........................................................................................................................3
Rationale......................................................................................................................................4
Literature review..............................................................................................................................4
Introduction..................................................................................................................................4
Theories of 3PL outsourcing and its impact on employee performance of FMCG.....................5
Literature gap...............................................................................................................................7
Summary......................................................................................................................................7
Methodology....................................................................................................................................7
Data collection method................................................................................................................7
Data analysis................................................................................................................................8
Sampling method and sampling size............................................................................................8
Research instruments...................................................................................................................9
Reference list.................................................................................................................................10
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Introduction
The study has determined content that is expressed a clear view of the research topic. The
chapter consists of research aim, research objectives and research questions, so that research has
understood its necessity. The objectives have described the impact of 3 PL outsourcing on a
performance of companies. It has included a rationale which mentions a description of the
current issue, a reason for issue using 3PL outsourcing. The research had illustrated that how
companies will develop their operations for serving needs to people on time and improves profit
level.
Research aim
The aim of this research is to find out advantages of 3PL outsourcing that influence employees
towards their performance for improving growth of FMCG.
The research will provide construct a structure that contains positive points of 3PL outsourcing
that enhance jobs of HRM and supply chain.
The outcome of research is able to develop logistic services of FMCG Company
Objectives
 To construct vulnerability in firm outbound and inbound logistic flow
 To identify the factors behind 3PL outsourcing
 To highlight the impact of 3PL outsourcing on FMCG company
 To find out the issues of 3PL outsourcing that affects the working environment and
employee performance of the company
 To recommend strategies to resolve the issues in 3PL outsourcing for the betterment of
employee performance of FMCG company
Research question
1. What is the structure of vulnerability in firm outbound and inbound logistic flow?
2. Which are the factors behind 3PL outsourcing?
3. What is the impact of 3PL outsourcing on FMCG Company?
4. What are issues of 3PL outsourcing that affect the working environment and employee
performance of the company?
5. Which are the recommended strategies to resolve the issues in 3PL outsourcing for the
betterment of employee performance of FMCG Company?
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Rationale
FMCG company is unable to access their 3 PL outsourcing method. There are several disputes
occur in their structure of 3PL outsourcing process. In this process, a company has linked to
another manufacture enterprise with the third party. Collis and Hussey (2009) mentioned that in
this process, all three have got profit from their business. The specific enterprises have not
maintained their structure so that it has affected a performance of a company as well as
employees. In order to avoid all faults of the structure of procedure, researchers will engage in
research to improving the performance of the company using positive areas of 3PL outsourcing.
The company does not get correct methods to operate the 3PL outsourcing. However, it has
become drawbacks from the FMCG (Denscombe, 2010). They are unable to supply requirements
or needs of customers on time. The entire process of a company has hampered from these faults.
Employees do not give their best effort towards people. Customers have given unsatisfied
feedbacks to a company and they have lost their reputation.
Nowadays, FMCG has faced many problems due to inappropriate access to the methods
(fmcg.ie, 2017). They have not meet demands of customers. Employees have not got job
satisfaction. The company has decreased their level of profits and lost customers.
The research has demonstrated light in those areas which have needed improvement. In order to
identify positive points are of 3PL outsourcing method and implement a structure of the working
process. In addition, it has inputted impact of 3PL outsourcing on a performance of employees of
FMCG (fmcg.ie, 2017). Thus, they will get opportunities for improving performance that helps
to satisfy customers of a company. It will also help to maintain a reputation of company among
people.
Literature review
Introduction
Logistic outsourcing is a process that involves the use of external logistic companies to perform
activities that was previously performed traditionally. Different theories are discussed in this
chapter. Transaction theory, Economic theory and supply chain management theory is taken an
overview from journal "Effect of information sharing and process coordination on logistics
outsourcing" to gain more proper information. Literature review was undertaken to study
outsourcing theories. Based on FMCG company (Ireland) logistic service has been provided. The
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term 3PL is widely used in FMCG Company. In previous literature the use of logistic services
was described properly hence, there is literature gap between previous theory and present theory.
Theories of 3PL outsourcing and its impact on employee performance of FMCG
A presentation on decision making framework for outsourcing levels of logistic activities. These
have various executive services which are needed to make proper planning and controlling level
of activities. FMCG Company has undertaken for proper supply chain management. According
to Liu et al. (2015), the supply chain management help in flow of goods and services that help in
involving the movement and storage of raw materials. This theory is related to design, planning,
executive, monitoring and control of supply chain activities. The supply chain management
theory deals with various steps.
Supply chain management allows companies to focus on their skills. The supply chain
management theory states that there are five steps of supply chain development.
Figure 1: Steps of five supply chain management
(Source: Liu et al. 2015)
The five step of supply chain management help in performance of FMCG Ireland for taking new
aspects in retail marketing. The supply chain management helped to share minimal information.
The 3PL helps in to communicate with supplier and consumer which plays huge role on the
performance of FMCG (Ireland). The third party logistic has serviced one third of their total
logistic budget in order to support 3PL services. FMCG company management approached that
there view relationships as one of the key aspects on firm in order to raise their performance and
to provide best practices to many companies. The relationship with market is essential for FMCG
Company that helps in evaluating the performance of 3PL (Aktan et al. 2016).
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Step1MinimumsharingofinforamtionStep2KeyfunctiongforsharinginformationStep3InformationsharedwithinternalfunctioningandcollaborationwithexternalpartiesStep4StrategicpartnershipwithpartnersandcustomersStep5Communicationwithsupllierandconsumer

Transaction cost theory is based on the actual cost of outsourcing of production and services
provided based on cost. Transaction cost theory was developed by Ronald Coase. This
theoretical framework helps in predicting performance of company. 3PL company supports the
supply chain and logistic. It has helped in raising about 77% of domestic Fortune and 500
companies has started to take services from third party logistics providers (iosrjournals.org,
2017). This theory is focused on change in external environment, focuses on minimising of
transaction cost of company. This help in negotiating transportation cost hence, this help
company to gain more profit. It can be said that there are varieties of changes in which it is
necessary for them to implement in proper manner. The implementation of transaction cost
theory in FMCG Company in order to make their performance better in retail marketing. It can
be said that there are varieties which help in making more variable change in transaction cost and
based on it there further investment planning is done. In year 2004 the consumer goods
companies in Ireland has raised the use of 3PL that is about 56% and cost reduction is measured
about 54% (brage.bibsys.no, 2017). The FMCG companies use transaction cost theory in its
logistic services which is necessary for them to make to gain more profit. It can be said they by
implementation of transaction budgeting in an organisation for making transaction cost more
efficient and less. It is necessary for them to make in more appropriate in better manner because
this help in analysing the profit if FMCG company. The transaction cost theory is needed which
is necessary for them to make proper implementation of an organisation which is necessary for
them to make transaction at lower cost. The freight charge of transportation of company is
covered by implementation of transaction cost (Ghasemi and Shoshtari, 2014).
Economic theory is the theory of commercial activities such as consumption of goods and
production. The increases in consumption help in raising economy. According to Huo et al.
(2017), the economic theory is all about the consumption and production of goods in an
organisation. The production rate is high then it will help 3PL to make their services better in
order to raise the consumption. Moreover, if production and cosnupti0n is high the third party
logistic will play huge role for both the companies. The manufacturers and retail market can raise
their production and consumption which is necessary for FMCG to make their performance
better. Hence, company production will be more dependent of logistic services. The third party
logistic services are needed in order to make the performance of FMCG Company better (Wang,
and Abareshi, 2015).
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By implementation of three theories the FMCG company performance is raised and this will also
help in providing better performance of company in retail marketing. Hence, cost effectiveness is
one of an essential part which is necessary for them to make their performance in better manner
(Bajec and Zanne, 2014).
Literature gap
There is gap in literature on research has was done by previous researcher. They have focused on
the use of logistic service and how they help company to carry their work. The performance of
company has not been discussed in earlier literature. This literature deals with performance of
company affected by 3PL outsourcing. The use of logistic service has been used in the
organisation moreover further research is needed in order to find out effect of 3PL outsourcing
on the performance of FMCG company (Ireland) (fmcg.ie, 2017). Moreover, certain changes are
needed in order to gain proper analysis which is needed for company to make their performance
in proper manner.
Summary
In this chapter of dissertation the supply chain management theory has been discussed which
help in analysing the facts which is necessary in FMCG Company. Economic theory is also used
which helped in explaining the importance of both financial and non performance of FMCG
company. Transaction cost theory is also use in literature review. There was gap in literature
because in previous research logistic service has been discussed and it had not focused on 3 PL
logistic and it effect on performance of company. This section of literature review helps in
analysing the effect of 3PL outsourcing on the performance of FMCG Company.
Methodology
Data collection method
In this study, researchers will apply primary data collection method. Raw data is a term for data
collected at source. This type of information will determine directly from first-hand sources.
Using this method, research will get information about current processes of work culture of
FMCG. The candidates will go through a face to face interview method. Wilhelm-Benartzi et al.
(2013) mentioned that they will get proper views or opinions about procedures from their
employees. If researchers will not understand current drawbacks of programs of FMCG, then
they will not implement 3PL outsourcing sourcing techniques properly (fmcg.ie, 2017). For
those reasons, primary data collection method will appropriate for this research study.
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Data analysis
Both two qualitative and quantitative analysis will be used for completing this research. The
entire analysis process will evaluate analytical and logical data reasoning to examine each
component. Quantitative data analysis is a systematic approach to investigate which numeric
data is gathered from a survey. The analysis will involve Likert scale because it will develop the
principle of measuring attitudes through asking to respond to a set of close-ended questionnaires
about recently following the structure in FMCG Company to employees. Goodman et al. (2013)
mentioned that the entire process will give several options such as average agrees, strongly
agree, not agree, neutral. From these procedures, the research will get overall views of
employees about their companies’ structure of maintaining profits.
Next researcher will go for quantitative data analysis. It is the range of procedure whereby
researchers will collect some of understanding, explanation and interpretation of the people as
well as situations of FMCG Company (fmcg.ie, 2017). The process will conduct the interview on
specific persons of the company with several descriptive open-ended questions. From the
analysis, researchers will descriptive and quality answers. Different persons have the different
view about company's role in improving performance. The elements of answers will play
important roles to input 3pl outsourcing method to enhance profits of FMCG (fmcg.ie, 2017). In
this process, the analysis will determine perspectives of persons about the performance of a
company.
Sampling method and sampling size
Researchers will apply non-probability as the sampling method. However, the sampling method
will be helped in collecting in a procedure that does not provide all individuals in population
equal opportunities of being selected. In order to measure the recent performance of FMCG,
research will identify faults of performance structures of the company through sampling non
probability method. Pan et al. (2014) mentioned that the method will be chosen accessibility to
purposive judgments of research about the topic.
For the research study, researchers will include fifty employees of FMCG for survey method
(fmcg.ie, 2017). On another hand, the entire interview process will conduct on three managers of
different departments of the enterprise.
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Research instruments
The candidates will apply survey method and interview process. Using those methods, research
will get information that enhances performances of employees as well as companies.
All close-ended questionnaires will involve in survey method for gathering the opinion of
employees. For an interview, open ended questions will be asked to managers of FMCG.
The entire methodology will be carried out researchers to gathering all relevant information
about the current context of performance of FMCG. If the researcher will not determine recent
conditions of performance, then they cannot be rectified by 3PL outsourcing method. In order to
update performances of employees, they will take suitable actions with this research work.
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Reference list
Aktan, C., Sahin, E.E. and Basaran, N., 2016. RELATION OF 3PL AND 4PL ACTIVIES AND
THEIR EFFECT ON EMERGING ECONOMIES. International Journal of Management
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Bajec, P. and Zanne, M., 2014. The current status of the Slovenian logistics outsourcing market,
its ability and potential measures to improve the pursuit of global trends. International Journal of
Logistics Systems and Management, 18(4), pp.436-448.
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logistic performance. available at:
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Denscombe, M. (2010) Ground Rules for Social Research, Maidenhead, Open University Press.
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Huo, B., Huo, B., Liu, C., Liu, C., Chen, H., Chen, H., Zhao, X. and Zhao, X., 2017.
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Physical Distribution & Logistics Management, 47(9), pp.927-948..
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http://www.iosrjournals.org/iosr-jhss/papers/Vol20-issue7/Version-3/K020736265.pdf.
[Accessed on 2th December, 2017].
Liu, C., Huo, B., Liu, S. and Zhao, X., 2015. Effect of information sharing and process
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Pan, A.C., Weinreich, T.M., Shan, Y., Scarpazza, D.P. and Shaw, D.E., 2014. Assessing the
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