Global Logistics Management

This report provides an overview of global logistics management and the role of third party logistics providers in supply chain management. It discusses the benefits of outsourcing logistics operations, such as focusing on core areas of the business and reducing liabilities. The report also explores the capabilities of third party logistics providers and the challenges in B2B outsourcing relationships. Relevant industry examples, such as DHL Supply Chain and C.H. Robinson, are included to illustrate the significance of third party logistics.

Global logistics management
[Type text]
Microsoft

LOGISTICS 1
Executive summary
Global logistics management refers to managing the operations of business via supply chain
across the globe, starting from the place where they are produced to the end until they reach
the ultimate consumer.
Third party logistics (3PL) service provider are specialised in handling the supply chain
operations of the companies. Basically they handle the outsourced logistics of different
companies through supply chain management.
In this report, the evaluation of third party logistics is been described along with its role and
challenges also some relevant examples are used to evaluate the significance of the third
party logistics. This helps to understand the management of global logistics and how
switching to third party logistics can actually help to focus on the core areas of the business.

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Contents
Introduction...........................................................................................................................................3
Third party logistics...............................................................................................................................4
Supply chain management concepts......................................................................................................4
Core logistics services offered by the third party logistics.....................................................................5
Distribution services..........................................................................................................................5
Transportation services......................................................................................................................5
Shipment services..............................................................................................................................5
Financial services..............................................................................................................................5
Supply chain goals of B2B buyers..........................................................................................................6
Effective collaboration......................................................................................................................6
Better quality.....................................................................................................................................6
Financial success...............................................................................................................................6
Stabilization.......................................................................................................................................6
The rationale to outsource to third party logistics provider...................................................................7
Focus on the key areas of the business..............................................................................................7
Reduction in the liabilities.................................................................................................................7
Large scale of economies...................................................................................................................7
Strengthen the customer satisfaction..................................................................................................7
The capabilities and role of third party logistics providers in the supply chain management................8
Use of information technology for the transaction purpose...............................................................8
Use of logistics in the e-business.......................................................................................................8
Significant contribution to relationship between consumer and the manufacturer.............................8
Challenges in B2B outsourcing relationships....................................................................................9
Communication hindrance.................................................................................................................9
Obsolete technology..........................................................................................................................9
Monitoring issues..............................................................................................................................9
Relevant industry example....................................................................................................................9
DHL Supply chain.............................................................................................................................9
C.H. Robinson.................................................................................................................................10
Conclusion...........................................................................................................................................11

LOGISTICS 3
Introduction
Global logistics basically refers to the management of the goods via a supply chain from the
place where they are produced to the place of the final consumption of the goods, and
covering the process around the world. An ideal logistic system focuses on creating various
utilities for the business and the ultimate target is to fulfil the needs of the customers and their
satisfaction while maximising the profits of the company (Ron Basu, 2016). The management
of supply chain activities in such a way that maximizes the customer satisfaction along with
the company’s profit. The process of supply chain management (SCM) activities includes
product development, production, sourcing, and logistics.
The satisfaction of the customer is the primary concern for any firm while increasing its
profits. Usually firms cannot manage to focus on all its operations due to which the
productivity of the firm is hampered possessing a threat for the organisation. The efficient
management of supply chain activities like sourcing of the goods, handling the work in
progress, storage facilities , distribution channel, and transportation of the goods. The supply
chain concept was introduced by the companies in order to reduce their costs and to stay
competitive in the business scenario (Christopher, 2016).

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Third party logistics
Third party logistics are commonly referred to as firms providing services of outsourced
logistics which involves activities like shipping, storing and transportation of the goods. The
services offered by the 3PL includes- warehousing, physical distribution, consolidation of
freight, and transportation. The concept of third party logistics allows the firms to concentrate
on the key areas of their business unit for the proper achievement of goals. The outsourcing
of the activities related to supply chain management allows the firm to focus on the important
tasks while ensuring the customer satisfaction. With addition to the services offered by the
third party logistics now also offers the marketing services to save time for client companies
and provide them best services with the minimum of the cost (Blokdyk, 2018).
Supply chain management concepts
The concept SCM commonly refers to the process of management regarding the activities
from work in progress to finished goods reaching the ultimate consumer. It is basically
following the management process in order to perform the logistics activities efficiently.
SCM covers all the activities from the production to development of the product till the
transportation of the product. It is mainly focused towards the converting the raw material
into the finished consumable goods, all other steps and the processes are involved a midst the
process of converting goods into the finished goods. It helps to create customer value and
also helps the organisation to gain a competitive advantage the management of all the
logistics activities requires high expertise and skills to perform all the functions. Once all
these functions are performed properly it can lead to reduced costs of the company or the

LOGISTICS 5
organisation as these help to establish customer value by focusing on creating the utilities
which in future helps to reduce the overall costs of the firm (McIntire, 2014).
Core logistics services offered by the third party logistics
Distribution services
The distribution services offered by the third party logistics comprises of the activities such
as choosing of distribution channel, selecting the channel, negotiating the payment modes and
transfer of goods to the ultimate consumer. The 3PL also focus to provide time and place
utilities to the client companies and the customers, by creating these utilities the third party
logistics can focus on the enhancement of their as well as the client companies business.
Transportation services
The 3PL provides the transportation services as well which involves taking the prominent
decisions regarding the transportation of the products to the customer. These majorly include
deciding on the mode of transport according the nature of the goods to be transported.
Shipment services
The basic shipping services that the third party logistics provide is the retail packaging,
reporting, inventory and order management including the freight. The freight forwarding
agencies do not include the other services that the third party logistics provide.
Financial services
Third party logistics also provide various financial services in terms of freight payment,
audits, tracking and control (Bohling, 2013).

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Supply chain goals of B2B buyers
Effective collaboration
The SCM focuses on reducing the struggle by assembling all the tasks related to supply of
products to the consumers. The assembling of all the tasks of the supply of the product to the
consumer tends to create the collaborative efficiency which facilitates the reduction in costs
and better service to the consumers.
Better quality
The primary goal of any firm is to satisfy their customer needs, although B2B firms do not
get the opportunity to receive the direct feedback from their customers. Eventually ensuring
the best quality is the primary goal of the SCM firms. The retailers pass the feedback to the
manufacturers to inform them about the quality goals and the requirements.
Financial success
The supply chain acts as the source through which all the business units are pulled towards
the destination of satisfying the customers. To ensure the same the SCM constantly works
hard to achieve success in the financial terms at the same time ensuring the efficiency in costs
to safeguard the profits of the company.
Stabilization
Once the customer satisfaction is achieved and the financial condition is also stable then the
next major goal or objective of the supply chain is to gain the stability in the market which
can be achieved through team spirits and fulfilling all the tasks related to logistics in the best
possible manner to achieve the stability and the long term success of the firm (Michael D.
Hutt, 2017).

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The rationale to outsource to third party logistics provider
The primary benefit to the companies outsourcing the work to the third party logistics
providers could be that by outsourcing they can pay utmost attention on the core area of the
business activities. Following are some of the major reasons of outsourcing the logistics
operations to the third party logistics service provider (benjamin, 2018).
Focus on the key areas of the business
By outsourcing the activities the company can focus onto the core areas of the firm without
worrying much about the delivery of the products to the ultimate consumers and will be able
to use those resources that were formerly applied on the supply chain operations.
Reduction in the liabilities
Other than the transportation, shipping and warehousing there are several other back- office
tasks which needs to be taken care of and by outsourcing all that work is under the
responsibility of the service providers this in turn makes the company free from all this kind
of grunt work.
Large scale of economies
Organisations always aim at achieving the economies of scale and also try their best to
achieve the same. By outsourcing the operations of logistics to the third party service
provider the company eventually turns out to achieve the same as the 3PL service providers
have an expertise which helps to facilitate the economies of scale.
Strengthen the customer satisfaction
3PL providers are the experts in the field of supply chain and thus have better domain of the
same through which they can formulate and implement better strategies which tend to
increase the customer satisfaction regarding the services offered (Folinas, 2018).

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The capabilities and role of third party logistics providers in the supply
chain management
The overall contribution done by the third party logistics in the Supply chain clearly proves
the significant role played by the 3PL in the market. Following are the capabilities of the 3PL
that signifies the role of the third party logistics in SCM.
Use of information technology for the transaction purpose
The 3PL use the information technology for the transaction to avoid the errors. Also this
helps to provide the customer a great service and a chance to connect with them for
understanding their needs in a better way. This also helps to overcome the situation of
uncertainty in the business by keeping a record of every transaction and then transferring the
information to the manufacturer.
Use of logistics in the e-business
There is immense competition among the firms of e-business and the logistics plays an
important role in the satisfying the customers need. Capturing the needs of the customers and
then providing the better service than that of the competitors, is possible because of the
advancements in the supply chain operations of the logistics (Michael Freitag, 2018).
Significant contribution to relationship between consumer and the manufacturer
With the use of information technology in the supply chain, the third party logistics service
provider can now inform the manufacturer about the needs of the customer particularly so
that the manufacturer can work accordingly. This eventually helps to bridge up the
communication gap between the manufacturer and the consumer this also helps to gain a
competitive advantage over the several competitors in the market (Anna Burduk, 2018).

LOGISTICS 9
Challenges in B2B outsourcing relationships
Communication hindrance
There a lot of difficulties related to the communication with the overseas outsource company
because the language is different, cultural priorities are different which ultimately becomes a
hindrance (McIntire, 2014).
Obsolete technology
The absence of latest technology becomes a major challenge as the customers are not
satisfied which can hamper the productivity of the company in the long run. Some of the
outsourcing firms promise of the latest technology at the time of contract but later the
promise is not kept in the best manner (Folinas, 2018).
Monitoring issues
There are monitoring issues with the manufacturer as the outsourcing firm is in the overseas
country because of which the monitoring of the working system of the outsourcing firm
becomes difficult and the controlling measures are not then implemented carefully.
Generally, the b2b firms usually suffer this kind of challenge while doing business
internationally as the distance becomes the issue (Bramlett, 2018).
Relevant industry example
DHL Supply chain
It is one of the largest logistics firm, USA. The company provides one of the best logistics
services and it’s headquarter is at Bonn, Germany (Logistics, n.d.). The contract with the firm
covers the whole logistics solutions related to the supply chain. The CEO of the company is
John Gilbert. The company was formulated in 1969 DHL provides logistics services in more

LOGISTICS 10
than 200 countries and around 10-12 thousand destinations are covered by the company
(Gruchmann, 2018).
C.H. Robinson
C.H. Robinson is a third party logistics firm who also provides multimodal transportation
services for the transportation of goods. The company is one of the leading logistics service
providers in America, the headquarters of the company are at Minnesota, USA. The C.H.
Robinson stands for the Charles Henry Robinson (Robinson, 2018), it is a global supply chain
logistics company and John Wiehoff is the CEO of this leading company as it helps more
than 120000 companies with its quality services for the shipment of goods (Robinson, n.d.).

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Conclusion
The report conclude that through the critical analysis and evaluation about the third party
logistics and the supply chain management services, It is certainly evident that there is a huge
need of this concept in the market as the big companies cannot handle all the operations and
eventually it becomes difficult for the companies to focus on the core or the more significant
areas which require more time and resources. Outsourcing these operations enables the
companies to develop in the long run as the third party logistics service providers also help to
build a strong customer base which increases the goodwill of the company and helps to gain a
competitive advantage over the other firms of the market. Also through relevant examples the
significance of third party logistics service providers is been described.

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Gruchmann, T., 2018. Logistics Social Responsibility and Dynamic Capabilities:
Conceptualization and Empirical Analysis. Germany: kassel university press GmbH.

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